Episode 159

26th May – 1st June 2025

Sanctions

US Treasury Issues Immediate Sanctions Relief for Syria Amid Policy Shift

The US Department of the Treasury's Office of Foreign Assets Control (‘OFAC’) has announced a significant shift in sanctions policy regarding Syria. On 23rd May 2025, OFAC issued Syria General Licence 25, authorising transactions previously prohibited under US sanctions and effectively lifting broad restrictions on economic engagement with Syria. This move follows President Trump’s 13th May announcement that the US would cease sanctions on Syria to encourage investment and private sector activity.

The sanctions relief aligns with the administration’s ‘America First’ strategy and is intended to revitalise Syria’s economy while maintaining restrictions on transactions linked to terrorist groups, human rights violators, and individuals affiliated with the former Assad regime. The new policy reflects a broader effort to support Syria’s economic recovery and stability while ensuring that Russia, Iran, and North Korea—key allies of the Assad regime—do not benefit from the sanctions rollback.

Additionally, the State Department has issued a waiver under the Caesar Syria Civilian Protection Act, facilitating foreign investment in Syria. The Financial Crimes Enforcement Network (‘FinCEN’) is also permitting US financial institutions to maintain correspondent accounts for the Commercial Bank of Syria, further easing financial restrictions. OFAC has pledged to issue further guidance on the implementation of these new policies in the coming weeks.

This shift marks a pivotal moment in US foreign policy toward Syria, reflecting a concerted effort to support economic growth while maintaining controls on entities deemed threats to US interests.

UK designations updates

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has made a range of updates to its designations. First, under the Russia (Sanctions) (EU Exit) Regulations 2019, the asset freeze and trust service sanctions against Michel Litvak, identified as benefiting from or supporting the Russian government through his ownership of OTEKO, a company operating in Russia's strategic transport sector, have been reaffirmed. It has also made amendments under the same regime which relate to entities allegedly involved in undermining Ukraine’s sovereignty by supplying technology to Russia’s defence sector. Secondly, under the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019, 12 entries remain subject to asset freezes, while Lionel Dumont has been delisted. Thirdly, under the Zimbabwe (Sanctions) (EU Exit) Regulations 2019, an update removed five entries from the Consolidated List, including senior officials and the state-owned Zimbabwe Defence Industries, lifting their asset freezes. The Zimbabwe Regulations target individuals and entities involved in human rights abuses, repression of civil society, or actions undermining democracy and the rule of law in Zimbabwe. Financial institutions must ensure compliance, and further details are available on the UK government’s sanctions webpage.

EU Lifts Economic Sanctions on Syria, Formalising Political Shift

On 28th May 2025, the European Council adopted legal acts lifting all economic sanctions on Syria, except for those based on security concerns. This decision formalises the political agreement announced on 20th May, aiming to support Syria's transition toward an inclusive and peaceful future.

As part of the move, 24 entities—including banks, media outlets, and companies in key sectors like oil, cotton, and telecommunications—have been removed from the EU sanctions list. However, restrictive measures targeting individuals and entities linked to the Assad regime have been extended until 1st June 2026. Additionally, new sanctions have been imposed under the EU Global Human Rights Sanctions Regime in response to human rights violations in Syria’s coastal region.

The EU reaffirms its commitment to supporting Syria’s recovery and political transition while continuing to monitor developments and impose further restrictions on those responsible for human rights abuses.

Money Laundering

Swiss Police Chief Proposes Shift in Money Laundering Burden of Proof

Eva Wildi-Cortés, head of Switzerland’s Federal Office of Police (‘Fedpol’), has raised the idea of reversing the burden of proof in money laundering cases, similar to Italy's approach. Under such a system, individuals suspected of money laundering would need to prove that their funds come from legal sources, or risk forfeiture to the state.

In an interview, Wildi-Cortés highlighted the growing number of suspicious activity reports submitted to the Money Laundering Reporting Office Switzerland (‘MROS’), which surged by more than 25% in 2024. She pointed out the increasing use of cryptocurrencies to obscure illicit funds, noting the sector’s comparatively weak regulation.

Fedpol is currently working on a broader strategy to combat organised crime, expected by the end of 2025. The agency is also pushing for improved information-sharing between Switzerland’s cantons to strengthen law enforcement efforts.

India Pushes FATF to Reconsider Pakistan’s Grey List Status Amid Rising Tensions

India is reportedly preparing to urge the Financial Action Task Force (‘FATF’) to reinstate Pakistan on its grey list, citing concerns over cross-border terrorism. The grey list includes jurisdictions under increased monitoring for deficiencies in combating money laundering and terrorist financing. Pakistan was removed from the list in 2022, improving its standing with international lenders.

Additionally, India is expected to oppose upcoming World Bank funding for Pakistan, arguing that financial aid is indirectly supporting terrorism. The move comes amid heightened tensions between the two nations, with Indian officials alleging that Pakistan’s arms purchases spike following IMF loans. Prime Minister Narendra Modi warned that Pakistan would face severe economic consequences for continued terrorist activities.

UAE and EU Strengthen Cooperation in Anti-Money Laundering and Counter-Terrorism Financing

The United Arab Emirates (‘UAE’) hosted the 8th EU-UAE Structural Dialogue on Anti-Money Laundering and Countering the Financing of Terrorism in Abu Dhabi, reaffirming its commitment to combating financial crimes in partnership with the European Union (‘EU’). Senior representatives discussed judicial coordination, law enforcement collaboration, and financial intelligence exchange, aiming to enhance transparency and resilience in global financial systems. The dialogue reviewed ongoing cooperation, identified emerging risks, and explored expanded joint efforts to uphold compliance standards. Both sides agreed on tangible areas for further collaboration, reinforcing their shared commitment to financial security and international cooperation. The meeting was co-chaired by UAE Assistant Minister for Economic and Trade Affairs Saeed Al Hajeri and EU Ambassador Lucie Berger, alongside senior officials from relevant UAE and EU agencies.

Treasury’s Rollback of Corporate Transparency Act Sparks Broad Opposition

The US Treasury Department’s recent move drastically to limit the scope of the Corporate Transparency Act (‘CTA’) has faced significant backlash from lawmakers, law enforcement, national security experts, and advocacy groups. The interim final rule now restricts beneficial ownership reporting to foreign entities, excluding anonymous domestic companies—a decision critics argue undermines financial transparency and facilitates illicit activities.

Senators Sheldon Whitehouse and Chuck Grassley condemned the rule, asserting that it contradicts congressional intent and weakens protections against financial crime. National security experts and think tanks warned that exempting US domestic entities would allow corruption, sanctions evasion, and other criminal activities to persist unchecked. Law enforcement groups, including the National District Attorneys Association, emphasised that the rollback would hinder efforts to combat shell companies involved in illegal operations.

While Treasury justified the rule as easing compliance burdens for small businesses, organisations like the Main Street Alliance refuted this claim, arguing that ownership transparency is crucial to ensuring fair competition. Environmental crime watchdogs also pointed out that anonymous US companies play a significant role in laundering illicit funds tied to environmental destruction.

With public support for the CTA remaining strong, critics are urging Treasury to reverse its decision before finalising the rule, warning of potential international repercussions, including censure from the Financial Action Task Force.

Unlocking Motivation in Anti-Money Laundering: A Call for Leadership and Cooperation

Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania, delivered opening remarks at the Annual Anti-Money Laundering Centre Conference 2025, emphasising the importance of motivation in combating financial crime. He framed AML as not just an acronym but a guiding principle: Adequacy, Mobilisation, and Leadership.

Šimkus stressed that adequacy in AML efforts requires a balanced approach—financial institutions must strengthen vigilance without resorting to de-risking. He highlighted the need for mobilisation, citing the newly established European Anti-Money Laundering Authority as a potential game-changer in harmonising AML enforcement across the EU. Finally, he underscored leadership, defining it as the integrity and consistency of professionals working behind the scenes to safeguard financial systems.

He urged AML professionals to find motivation in their mission, reminding them that their work is not about managing financial risk but protecting justice and security. The speech reinforced the collective responsibility of regulators, financial institutions, and law enforcement in the fight against illicit finance.

Bribery and Anti-Corruption

South Africa’s Finance Minister Targets Corruption and Fiscal Discipline in Budget Speech

In his revised budget speech on 21st May 2025, South Africa’s Finance Minister, Enoch Godongwana, emphasised the government’s commitment to combating corruption and improving fiscal efficiency. He highlighted the National Prosecuting Authority’s Asset Forfeiture Unit, which has recovered over R5 billion from corruption-related cases and secured freezing orders worth R14.2 billion. The Minister outlined measures to enhance spending oversight, including expenditure reviews identifying R37.5 billion in potential savings and a data-driven approach to detecting payroll irregularities. He also stressed the importance of protecting whistleblowers and called for sustained political backing to ensure accountability. Additionally, the government plans to implement structural economic reforms, focusing on infrastructure development and streamlining underperforming programs to optimise public spending.

GRECO Calls for Anti-Corruption Reforms in Liechtenstein’s Government and Police

The Council of Europe’s Group of States against Corruption (‘GRECO’) has issued a report urging Liechtenstein to strengthen its anti-corruption measures for top executive officials, including government members, senior advisors, and the National Police. The report highlights concern over transparency, access to public documents, and the prince’s constitutional power to block criminal proceedings against officials suspected of corruption. GRECO recommends a coordinated integrity strategy, improved transparency in the Working Group on Corruption Prevention, and clearer rules for public consultations on draft legislation. Additionally, it calls for greater disclosure of meetings between the Prince and the Prime Minister to enhance accountability. Liechtenstein’s implementation of these 20 recommendations will be assessed in 2027. The press release of the announcement is here.

Slovak Central Bank Governor Convicted of Bribery Amid Legal Challenge

Peter Kažimír, governor of Slovakia’s central bank and a member of the European Central Bank’s governing council, has been found guilty of bribery and fined €200,000, with the possibility of a one-year prison sentence if the fine remains unpaid. The ruling is not final, and his legal team has indicated that he will appeal. Kažimír has denied any wrongdoing, stating that his reputation has been unfairly damaged.

Fraud

UK Fraud Losses Hold Steady at £1.17bn as Remote Purchase Scams Surge

The UK Finance Annual Fraud Report 2025 reveals that fraud losses remained at £1.17 billion in 2024, with unauthorised fraud cases rising by 14% to 3.13 million incidents. While Authorised Push Payment (‘APP’) fraud declined by 20%, remote purchase fraud surged by 22%, reaching 2.6 million cases and £400 million in losses. Criminals increasingly use social engineering tactics to trick victims into revealing one-time passcodes, enabling fraudulent transactions and digital wallet registrations. The Payment Systems Regulator introduced mandatory reimbursement rules for APP fraud victims in October 2024, leading to 86% of stolen funds being returned within the first three months. Despite improved fraud prevention measures, experts warn that fraudsters are adapting rapidly, shifting tactics to exploit new vulnerabilities in online transactions. The Report is available here.

Fannie Mae Partners with Palantir to Combat Mortgage Fraud Using AI

Fannie Mae has announced a partnership with Palantir to launch its AI-powered Crime Detection Unit, aimed at enhancing fraud detection in the US mortgage market. The initiative leverages Palantir’s advanced AI and machine learning technology to monitor transactions, identify anomalies, and trigger investigative actions.

Fannie Mae Chairman William J. Pulte emphasised that the technology would help root out fraudulent actors, while CEO Priscilla Almodovar highlighted its ability to analyse vast datasets to detect previously undetectable patterns. Palantir CEO Alex Karp described the partnership as a revolutionary step in combating mortgage fraud.

With over $4.3 trillion in assets, Fannie Mae plays a critical role in the housing market, guaranteeing a significant portion of US mortgages. The company expects the Crime Detection Unit to save millions in future fraud losses while strengthening financial security for lenders, homebuyers, and taxpayers.

Other Financial Crime News

FCA Bans Former Credit Suisse Vice President Over Corrupt Mozambique Loan Scandal

The UK Financial Conduct Authority (‘FCA’) has permanently banned Detelina Subeva from the financial services industry following her US conviction for conspiracy to commit money laundering. Subeva, a former Credit Suisse vice president, pleaded guilty in 2019 to accepting $200,000 in unlawful kickbacks linked to corrupt loans arranged for the Republic of Mozambique. The FCA’s decision follows earlier bans on Andrew Pearse and Surjan Singh, who collectively accepted over $50 million in kickbacks. Credit Suisse was previously fined £145 million in 2021 for due diligence failures related to the $1.3 billion Mozambique loan scandal, and agreed to write off $200 million of Mozambique’s debt. The FCA reaffirmed its commitment to removing individuals engaged in financial misconduct from UK markets. The Final Notice is here.

Spotlight on Corruption responds to UK Economic Crime Levy Report

Pressure group, Spotlight on Corruption, has published its comment on the UK Treasury’s first report on the Economic Crime Levy (‘ECL’). The ECL outlines how funds were allocated in 2023/24 to combat money laundering and financial crime. Key investments include £42.7 million for technology upgrades, such as a new Suspicious Activity Reports (‘SAR’s) portal and an asset recovery database, and £12.7 million for additional staffing across enforcement agencies. However, concerns remain over recruitment challenges, vague performance metrics, and the allocation of funds to Companies House despite alternative revenue sources. The report underscores the need for greater reinvestment of recovered assets and suggests the creation of an Economic Crime Fighting Fund to ensure sustainable funding. While the ECL has contributed to increased enforcement outcomes, experts argue that further government investment is necessary to match the scale of the UK’s money laundering problem. The Economic Crime Levy Report can be accessed here.

Europol Cracks Down on ATM Robbery Network Across Europe

Europol, in coordination with Dutch and German law enforcement, has dismantled a highly specialised criminal group responsible for a series of ATM explosions across Germany, Switzerland, and France. The network, primarily based in the Netherlands, used solid explosives to target cash machines, causing €1.5 million in damages and stealing €1.2 million, of which €290,000 has been recovered. Authorities arrested 18 suspects in multiple raids, seizing €360,000 in cash, €600,000 in cryptocurrency, and equipment used in the attacks. The criminals employed counter-surveillance tactics, collaborated with other groups, and used high-powered vehicles for swift getaways. Europol’s Operational Taskforce, involving investigators from several EU nations, played a key role in coordinating intelligence and enforcement actions. In a world of sophisticated methods of committing economic crime, this is a reminder that there are still those who operate ‘old school.’

Europol Cracks Down on Synthetic Drug Network Linked to Sinaloa Cartel

French authorities, supported by Europol, have dismantled a criminal network involved in synthetic drug production and trafficking, with strong ties to the Mexican Sinaloa cartel. The investigation, which began in June 2024, led to the seizure of 216 kilograms of crystal methamphetamine and the identification of two key organisers—one Algerian and one French national. The network relied on logistical support from Mexican cartels and sourced chemicals from China. On 19th May, law enforcement conducted 16 arrests across France and Belgium, seizing luxury goods, cryptocurrency, and cash. The operation highlights the growing presence of synthetic drug production in the EU, with Mexican cartels providing technical expertise to European criminal groups. Europol played a key role in coordinating intelligence and supporting real-time investigations.

Cybercrime

Cybersecurity Expert Urges Public to Use Secret Passwords to Combat AI Scams

Yahoo News reports that Cody Barrow, CEO of cybersecurity firm EclecticIQ, has warned that AI-generated deepfake scams are making impersonation fraud easier. He advises individuals to create secret passwords with family and friends to verify identities in case of suspicious video calls or messages. Barrow highlights the widespread impact of data breaches, emphasising that most internet users have had their personal details compromised at some point. He particularly urges older and younger users to adopt extra security measures. His warning follows recent cyberattacks on major UK retailers, including Marks & Spencer, which suffered a £300m breach due to human error.

Cyber Threats to Energy Infrastructure in Canada and Germany

Recent cyberattacks highlight the growing vulnerability of energy infrastructure to ransomware and other digital threats. In Canada, Nova Scotia Power suffered a sophisticated ransomware attack, compromising the personal and financial data of 280,000 customers. The stolen information, including bank account details and social insurance numbers, was leaked online, prompting concerns over identity fraud and financial security. Meanwhile, in Germany, the Federal Office for Information Security warned that the country’s electricity supply infrastructure is increasingly targeted by cyberattacks, particularly as decentralisation and digitalisation expand the sector’s exposure. Smaller power plants, such as wind turbines, are often less protected than larger facilities, making them prime targets for cybercriminals. Both incidents underscore the urgent need for enhanced cybersecurity measures to safeguard critical energy systems from disruption and financial exploitation.

Australia Mandates Ransomware Payment Reporting for Businesses

Australia’s new law which mandates reporting requirements for businesses which make ransomware payments came into force on 30th May. The new regulation aims to improve national cybersecurity and track financial transactions related to cybercrime. Companies affected by these rules must notify authorities when paying ransoms to cybercriminals, helping the government assess the scale of ransomware attacks and strengthen response strategies. The move aligns with broader efforts to discourage ransomware payments and improve transparency in cybercrime mitigation.

US Treasury Sanctions Philippine Firm for Facilitating Cyber Scams

The US Treasury’s Office of Foreign Assets Control (‘OFAC’) has sanctioned Funnull Technology Inc., a Philippines-based company accused of enabling large-scale virtual currency investment scams, commonly known as “pig butchering.” Funnull allegedly provided infrastructure for fraudulent websites, leading to over $200 million in reported losses from US victims. The sanctions also target Liu Lizhi, a Chinese national linked to Funnull’s operations. The FBI has issued a cybersecurity advisory to help identify and dismantle scam websites associated with the company.