Episode 170

11th July – 13th July 2025

Sanctions

UK Treasury Debt Payments Permitted for UN Sanctioned Persons Under Specific Conditions

The UK’s Office of Financial Sanctions Implementation (‘OFSI’) has issued new guidance introducing a targeted exception to existing financial restrictions. This exception allows payments relating to HM Treasury debt to be made to, or for the benefit of, individuals designated by the United Nations—on two key conditions.

First, the financial obligation must have been established prior to the individual's UN designation. Second, the funds must be directed to an account that meets the exception’s criteria, such as a frozen UK account or an account in a jurisdiction with equivalent sanctions enforcement.

This move aims to uphold financial obligations while maintaining the integrity of international sanctions frameworks. It reflects a nuanced approach to balancing legal commitments with broader compliance responsibilities.

FAQ added regarding the term 'domiciled'

On 10th July, the Office of Financial Sanctions Implementation (‘OFSI’) has added FAQ 153 to its FAQ page. FAQ 153 addresses how OFSI applies the term 'domiciled' in financial sanctions legislation.

UK Imposes Asset Freezes on Haitian Armed Groups

On 10th July 2025, the UK government updated its financial sanctions regime targeting Haiti under the Haiti (Sanctions) Regulations 2022, issued via the Sanctions and Anti-Money Laundering Act 2018. The updated Consolidated List now includes two armed groups: GRAN GRIF and VIV ANSANM, whose activities have been deemed threats to Haiti’s peace, security, and stability.

These groups are now subject to a full asset freeze, meaning UK individuals and entities must check for any financial connections to them, freeze any associated assets, and refrain from making funds or resources available to them. Reporting obligations to the Office of Financial Sanctions Implementation (OFSI) apply, including disclosing the nature and quantity of any identified assets. Non-compliance may constitute a criminal offence.

The groups are believed to be led by Luckson Elan (GRAN GRIF) and Jimmy Chérizier (VIV ANSANM), both previously listed by the UN Security Council for their alleged involvement in destabilising activities. These designations align with broader UN measures and are published across official UK and UN sanctions lists.

US Sanctions 22 Entities Tied to Iran’s Shadow Banking and Oil Trade

On 9th July 2025, the US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) designated 22 entities across Hong Kong, the UAE, and Türkiye for their roles in facilitating Iranian oil sales that benefit the Islamic Revolutionary Guard Corps-Qods Force (‘IRGC-QF’)—a US-designated foreign terrorist organisation. These companies form a key part of Iran’s “shadow banking” infrastructure, helping the regime bypass sanctions and funnel hundreds of millions of dollars toward terrorist activities and weapons programs.

Among the designated firms are front companies like Pulcular Enerji in Türkiye, which purchased Iranian oil using wire transfers and cash routed through Hong Kong-based firms including Amito Trading Limited and JTU Energy Limited. These entities helped channel funds through offshore accounts linked to IRGC-QF, often disguised via petrochemical and liquefied gas trades with intermediaries in Lebanon, Pakistan, and elsewhere.

OFAC’s move targets entities that materially assisted or acted on behalf of IRGC-QF, including firms like Golden Globe, Enka Trading, and Finesse Global Trading, which orchestrated tanker shipments worth hundreds of millions. Transactions were frequently coordinated with groups such as Hizballah via oil brokers like Concepto Screen SAL Off-Shore, previously sanctioned in 2022.

Treasury Secretary Scott Bessent emphasised that Iran’s use of shadow banking enables its destabilising activities across the region, noting that sanctions aim to disrupt these financial conduits rather than punish for punishment’s sake. All US-linked assets of the designated entities are now blocked, with significant penalties in place for violators.

OFAC Grants Temporary Wind-Down Authorisation for Albanese-Linked Transactions

On 9th July 2025, the US Treasury's Office of Foreign Assets Control (‘OFAC’) issued General Licence No. 8 under the International Criminal Court-Related Sanctions Regulations (31 CFR part 528). This license authorises US persons to wind down transactions involving Francesca Paola Albanese—or entities where she owns 50% or more—until 12:01 a.m. EDT on 8th August 2025.

The license permits only those transactions that are “ordinarily incident and necessary” for winding down business activities with Albanese. Importantly, any payment to a blocked person must be deposited into a blocked account in accordance with the ICCSR rules.

However, the license does not extend to other prohibited transactions, nor does it cover interactions with individuals blocked under ICC sanctions unrelated to Albanese. Any further activities require separate authorisation by OFAC.

Francesca Paola Albanese is an Italian human rights lawyer and academic who currently serves as the UN Special Rapporteur on the occupied Palestinian territories. Appointed in 2022, she is the first woman to hold this role, tasked with investigating and reporting on human rights violations in the region.

Albanese has been a vocal critic of Israel’s military actions in Gaza, describing them as genocide and calling for international accountability. Her recent report named dozens of Western companies allegedly complicit in the conflict, prompting strong backlash from the US government. On 9th July 2025, the Trump administration imposed sanctions on Albanese under Executive Order 14203, citing her support for International Criminal Court (‘ICC’) arrest warrants against Israeli and US officials.

Despite the sanctions, Albanese has stood by her work, stating she remains committed to justice and human rights. Her critics accuse her of bias and antisemitism, while supporters argue she’s being punished for doing her job as an independent investigator. The United Nations has called for the removal of the sanctions on Albanese.

AI Spurs Sophisticated Sanctions Evasion, Posing New Global Security Risks

The Royal United Services Institute warns that artificial intelligence is no longer an emerging threat—it’s already reshaping the landscape of sanctions evasion. Rogue states like North Korea and Iran are exploiting AI-driven tools to mask identities, automate fraud, and generate realistic counterfeit documents. Techniques include face-swapping in job interviews, AI-enhanced phishing campaigns, and rapid creation of synthetic business networks designed to bypass detection.

Traditional sanctions-busting strategies such as shell companies and false documentation are now being amplified by machine-generated deception, overwhelming current compliance systems. AI allows bad actors to manipulate customs data, generate fake shipping documents, and optimise evasion tactics at unprecedented scale and precision.

Although global financial institutions are deploying AI to improve detection, most tools still target familiar patterns rather than anticipating adaptive, adversarial strategies. Regulatory frameworks, meanwhile, lag behind—hampered by fragmented oversight and concerns over privacy. The EU’s AI Act seeks to introduce a structured approach, while the US grapples with inconsistent regulations.

The Financial Action Task Force (‘FATF’) has acknowledged AI’s emerging threat in its latest proliferation financing report but stopped short of decisive action, citing the issue’s infancy. Experts urge a radical rethink: enforcement systems must be redesigned to handle AI-driven threats before they outpace control measures entirely.

Money Laundering

FCA Updates PEP Guidance to Strengthen Proportionality and AML Clarity for UK Financial Institutions

The Financial Conduct Authority (‘FCA’) has published finalised guidance (FG25/3) on how regulated firms should treat Politically Exposed Persons (‘PEP’s) under the UK’s anti-money laundering framework. The updated guidance follows a statutory review mandated by the Financial Services and Markets Act 2023 and aims to ensure enhanced due diligence (‘EDD’) is applied proportionately—particularly to domestic PEPs, who are presumed to pose a lower money laundering risk than foreign counterparts.

The guidance introduces several refinements:

-          Clarification of roles: Non-executive board members of UK civil service departments are explicitly excluded from the PEP definition. Only individuals holding truly prominent public functions should be treated as PEPs.

-          Streamlined oversight: Senior management approval is still required when onboarding PEPs, their family members, or known close associates. However, firms have more flexibility in delegating these decisions, provided appropriate oversight is retained—particularly by the MLRO (Money Laundering Reporting Officer).

-          Refined EDD expectations: Lower-risk domestic PEPs can be subject to lighter due diligence measures. However, firms must apply a risk-based approach and justify higher scrutiny where needed—especially if the PEP is from a jurisdiction with weaker anti-corruption controls.

-          Improved operational clarity: The guidance better defines who counts as a PEP, including specific interpretations of roles within political parties, military ranks, and international organisations. It also addresses challenges with cross-border application and expectations for group-wide policies.

While many respondents to the FCA’s public consultation welcomed the updates, some sought further examples and flexibility on declassifying PEPs or assessing associated risks. The FCA has maintained its principles-based approach but added helpful language on trigger events and practical identification methods.

Overall, the document encourages firms to treat PEP relationships with care, precision, and proportionality—balancing robust AML controls with fair treatment of customers.

FATF Warns of Evolving Terrorist Financing Threats and Gaps in Global Preparedness

The Financial Action Task Force (‘FATF’) has released a comprehensive report spotlighting persistent and increasingly complex terrorist financing (‘TF’) risks. Drawing on contributions from more than 80 jurisdictions and over 840 private sector and academic submissions, the report underscores that terrorist groups continue to adapt their methods—combining conventional and digital techniques to exploit the financial system. These methods include the use of cash couriers, informal value transfer systems like hawala, digital platforms such as social media and crowdfunding, as well as the abuse of legal entities and non-profit organisations.

Despite progress, the FATF found that nearly 70% of assessed jurisdictions had structural or major deficiencies in investigating and prosecuting TF cases. The report stresses that both public and private sectors must urgently enhance technical compliance and operational effectiveness to counter these threats. Of particular concern is the rise of lone actors, often younger and radicalised online, who rely on microfinancing strategies, gaming platforms, and social networks to fund and facilitate attacks.

The report also explores the increasing convergence between TF and organised crime, especially in conflict zones where terrorist groups adapt to the chaotic environment. It highlights the risk of diversion of humanitarian aid in such regions and calls for proportionate, risk-based safeguards to protect essential humanitarian operations.

To bolster global response, the FATF recommends enhanced international cooperation and the development of targeted public-private partnerships. It includes practical risk indicators to aid detection, such as anomalies in travel, payment patterns, and online behaviour. The report, co-led with the United Nations Counter-Terrorism Executive Directorate and France, reinforces the need for coordinated intelligence and a dynamic understanding of the evolving threat landscape.

FATF Launches New Mechanism to Prevent Unintended Harm to Legitimate Non-Profit Organisations

In a major policy development, the Financial Action Task Force (‘FATF’) has introduced a dedicated procedure to tackle unintended consequences arising from countries’ misapplication of its Standards on non-profit organisations (‘NPO’s). These Standards aim to protect the sector from abuse linked to terrorist financing, but overly rigid enforcement has, at times, stifled legitimate NPO activities—undermining humanitarian work and civic engagement. The new process seeks to ensure that regulation remains proportionate, preserving the vital role of NPOs in crisis response and community support.

Under the new framework, concerns can be raised by countries, the IMF, or World Bank when FATF Standards are applied in a way that unfairly disrupts lawful NPO operations. The procedure complements FATF’s existing mutual evaluation processes and applies broadly across both FATF and FSRB member states, unless an FSRB opts for its own mechanism.

FATF President Elisa de Anda Madrazo emphasised that this initiative strengthens global efforts to combat illicit finance without compromising civil society. It aligns with FATF’s wider strategy to address procedural overreach and improve transparency and accountability. Implementation details are outlined in updated procedural documents, including those governing FATF’s fourth and fifth evaluation rounds.

EU Updates High-Risk List for Money Laundering and Terrorist Financing

On 9th July 2025, the European Parliament endorsed an update to the EU’s list of high-risk third countries for anti-money laundering and counter-terrorist financing (‘AML/CFT’). The vote followed a Commission proposal identifying jurisdictions with strategic deficiencies in their AML/CFT regimes. Parliament opted not to block the list's revision, meaning enhanced due diligence obligations will now apply to a new set of countries.

Ten jurisdictions were added to the high-risk list: Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela. Meanwhile, eight countries were removed: Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda, and the United Arab Emirates.

This classification—empowered by the Fourth AML Directive—triggers stricter controls for EU-based entities interacting with businesses from listed countries. In parallel, the Commission committed to reviewing the status of jurisdictions not flagged by FATF but with suspended memberships, such as Russia, following concerns from Members of the European Parliament.

Cairo Hosts Regional Workshop on Strengthening Money Laundering Investigations Across MENA

Cairo hosted a high-level regional workshop on investigating and prosecuting money laundering crimes, this week. The three-day event, which began on Monday, was organised by the Middle East and North Africa Financial Action Task Force (‘MENAFATF’) and Egypt’s Money Laundering and Terrorist Financing Combating Unit. It was held in collaboration with international partners including the United Nations Office on Drugs and Crime (‘UNODC’), the International Monetary Fund (‘IMF’), and the German development agency GIZ.

With 43 participants from MENAFATF member states, the workshop aimed to enhance regional expertise in tracing illicit financial flows. The agenda included practical case studies and in-depth discussions designed to bolster legal and investigative capabilities in tackling complex financial crimes. The initiative underscored a growing regional commitment to combatting money laundering through coordinated training and international cooperation.

Bribery and Corruption

Fighting Corporate Corruption: OECD Report Highlights Reform Gaps and Integrity Trends Across Eastern Europe and Central Asia

A new OECD report spotlights the efforts of 21 countries in Eastern Europe and Central Asia to strengthen business integrity and reduce corruption risks. While some legal and regulatory frameworks exist—such as requirements for beneficial ownership disclosure and corporate governance in listed companies—implementation and enforcement remain patchy.

In the area of corporate governance, only a few jurisdictions, notably Latvia, Lithuania, and Ukraine, mandate boards to oversee corruption risks, and even fewer combine this with regulatory supervision. Beneficial ownership transparency has seen progress in terms of registration mandates, but data verification and sanctioning for non-compliance lag significantly behind.

The report also notes that while awareness-raising campaigns are fairly widespread, practical support for internal company compliance systems is rare. Latvia stands out as the only country providing a legal “compliance defence” where robust anti-corruption controls can mitigate company liability.

On the institutional front, business ombudsmen exist in just three countries—Kazakhstan, Ukraine, and Uzbekistan—with Ukraine’s Business Ombudsman Council cited as a standout model. Integrity in state-owned enterprises is still weak across the region, with transparent board appointments and inclusion of independent directors being the exception rather than the rule. Romania is recognised for recent improvements in this area.

OECD Calls on South Africa to Intensify Fight Against Foreign Bribery Post-State Capture

The OECD has urged South Africa to strengthen its institutional framework and deepen efforts to combat foreign bribery as the country emerges from the prolonged effects of state capture. In its latest press release, the organisation highlights the critical need for South Africa to reinforce anti-corruption mechanisms and restore accountability in public institutions.

The OECD's recommendations follow an assessment of the country’s compliance with the OECD Anti-Bribery Convention, noting both progress and persisting gaps in enforcement. Particular emphasis was placed on the need to ensure independent prosecutorial decisions, improve corporate liability frameworks, and bolster investigative capacity. These steps are seen as essential to rebuilding public trust and preventing cross-border illicit financial flows.

The report reflects growing international pressure for more decisive action from South Africa, especially in light of high-profile revelations stemming from the Zondo Commission. As global scrutiny intensifies, the country faces a pivotal moment to implement reforms that solidify its commitment to ethical governance and economic integrity.

Western Balkans Strengthen Cross-Border Investigations into Digital Payments and Virtual Assets

A recent Council of Europe workshop held in Strasbourg (9–10 July 2025) convened over 30 professionals from across the Western Balkans to boost regional capabilities in investigating cross-border financial crime involving digital payments and virtual assets. Representatives from Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia collaborated on advanced investigative techniques and legal tools tailored to the evolving digital financial landscape.

Discussions focused on seizing and confiscating virtual assets, the legal admissibility of electronic evidence, and protocols for cooperation with private sector actors—including virtual asset service providers and payment platforms. The importance of ensuring the integrity and authenticity of digital evidence, while upholding procedural safeguards and human rights, was a key theme throughout the sessions.

This initiative is part of a broader EU–Council of Europe programme supporting anti-money laundering and anti-corruption efforts in the region. It reflects growing international emphasis on addressing technological risks related to financial crime and enhancing regional collaboration in tackling illicit cross-border flows.

Liberia Boosts Local Governance in Anti-Corruption Drive with UN Support

The Liberia Anti-Corruption Commission (‘LACC’), in partnership with the UNDP and funded by the UN Peacebuilding Fund, led a three-day workshop to empower local leaders from Bong, Lofa, and Nimba Counties. Held in Ganta, Nimba County, the training focused on instilling ethical leadership, promoting asset declaration, and fostering a culture of accountability in public service. LACC Executive Chair Counselor Alexandra Zoe framed transparency and verification not just as procedural duties but as moral obligations tied to public trust and leadership integrity.

UNDP Deputy Resident Representative Louis Kuukpen highlighted the need for unified efforts among public institutions, civil society, and traditional leaders to strengthen governance at the subnational level. He praised the initiative as a strategic step toward building inclusive systems that prioritise transparency and citizen engagement.

The training equipped more than 50 officials with practical knowledge on corruption risk analysis, Liberia’s Code of Conduct, and the role of civil society in oversight. This was followed by a public outreach event on July 4th, targeting everyday settings like markets and transport hubs to deepen community participation in governance. The outreach is part of a broader initiative—the Social Accountability and Transparency Project—implemented across all 15 counties with support from UNDP, UN Women, and Integrity Watch Liberia.

This multi-pronged approach aims to enhance service delivery, build public confidence, and institutionalise transparency at both community and national levels.

North Macedonia Commended for Anti-Corruption Progress as GRECO Closes Compliance Review

On 9th July 2025, the Council of Europe’s anti-corruption watchdog GRECO officially closed its compliance procedure for North Macedonia under the Fifth Evaluation Round. This decision reflects the country’s substantial progress in implementing recommendations aimed at reducing corruption within central government and the police. Of the 23 recommendations issued in 2019, GRECO confirmed that 17 have been satisfactorily implemented, with six still partially addressed.

Key reforms include enhanced transparency around top executive functions, such as publishing online the list of individuals attending government sub-committees and working groups. Updated guidance on gift reporting has been adopted, alongside plans for a public online catalogue. North Macedonia has also launched an electronic asset declaration system for elected and appointed officials, although it remains under development.

Additionally, draft amendments to the Law on the Prevention of Corruption and Conflict of Interest—aimed at strengthening sanctions—are expected by the end of 2025. GRECO praised these initiatives as signs of growing institutional commitment to integrity and public accountability.

EU Steps Up Anti-Corruption Efforts Amidst Ongoing Rule of Law Challenges

The European Commission’s 2025 Rule of Law Report underscores the centrality of anti-corruption efforts to preserving democratic integrity and public trust across Member States. The report finds that several countries have strengthened their institutional frameworks by adopting new anti-corruption strategies and allocating more resources to law enforcement, prosecution, and judiciary services. However, challenges persist, particularly around prevention mechanisms involving lobbying, conflicts of interest, and the effective prosecution of corruption cases.

In the EU enlargement countries, legal and institutional resilience has grown, with frameworks demonstrating capacity to resist undue political pressure. Nevertheless, serious gaps remain in the handling of high-level corruption cases, with authorities urged to improve investigation, prosecution, and final adjudication.

The findings are backed by the 2025 Eurobarometer survey, which confirms widespread public intolerance of corruption. The Commission stresses that sustained progress requires not only technical reforms but also stronger political will and accountability. These reforms are essential not only for safeguarding democratic norms but also for ensuring economic stability and investor confidence across the Single Market.

Investigative Journalists Take the Lead in Southeast Asia’s Fight Against Corruption

Investigative journalists across Southeast Asia are emerging as key actors in the region’s anti-corruption efforts, particularly in the realm of public procurement, which remains highly vulnerable to abuse. A recent UNODC-supported workshop in Kuala Lumpur brought together journalists under the Journalists Against Corruption (‘JAC’) initiative to sharpen cross-border collaboration and investigative skills. The initiative, co-led by the Philippine Centre for Investigative Journalism and backed by Sweden, focussed on equipping media professionals with the tools to uncover fraudulent contracts, rigged tenders, and ghost suppliers.

Recent investigations have exposed systemic abuses, such as trafficked individuals forced into scam centres linked to state actors and opaque procurement deals involving shell companies. These revelations underscore the importance of a robust media ecosystem in challenging impunity. The workshop also featured practical sessions on data analysis, red-flag identification, and protecting the integrity of digital investigations.

Examples from Thailand, Viet Nam, Indonesia, and the Philippines reveal the potential for journalism, when combined with civic activism and institutional will, to prompt legal reforms and accountability. As participants noted, corruption has had fatal consequences—making their work not just about transparency, but survival. Despite threats and censorship, journalists remain resolute, with one workshop attendee remarking, “If we don’t tell these stories, who will?”

Other Financial Crime News

FCA Disrupts Online Financial Crime in 2024, Targeting Rogue Firms and Finfluencers

The Financial Conduct Authority (‘FCA’) has dramatically escalated its crackdown on financial crime, according to its newly released annual report. In 2024 alone, it shut down or blocked over 1,600 websites suspected of operating without proper authorisation. This action was part of a broader strategy leveraging data and technology to prevent fraud and protect consumers. Collaborations with major tech platforms led to the removal of more than 50 deceptive financial service apps from app stores, while enforcement against online promotions included interventions targeting so-called 'finfluencers'.

The FCA also cancelled over 1,500 firm authorisations—up 20% from 2023—and ensured nearly 20,000 misleading promotions were amended or withdrawn. It interviewed 20 unauthorised influencers under caution and issued 38 alerts linked to illegal social media promotions. The regulator cited major reforms, including improved Consumer Duty protections, the introduction of an anti-greenwashing rule, and enhancements to access to cash for underserved communities. In wholesale markets, it implemented sweeping changes to listing and prospectus regimes while overseeing the orderly exit from LIBOR benchmarks.

FCA Chair Ashley Alder emphasised the foundation laid for the next five-year strategy, while Chief Executive Nikhil Rathi highlighted achievements such as faster authorisation times and the promotion of a more robust, trustworthy financial environment. This report underscores the FCA’s increasingly proactive and technology-driven approach to regulation, enforcement, and consumer protection.

Fraud Review Highlights Need for Legal Reform, Stronger Sentencing, and Cross-Sector Collaboration

The July 2025 update to the Independent Review of Disclosure and Fraud Offences, led by Jonathan Fisher KC, outlines mounting concern over the scale and complexity of fraud across England and Wales, where it now represents an estimated 43% of all crime. The review stresses the growing value of whistleblowing as an early intervention tool—especially in complex or high-value cases—and calls for sentencing to better reflect the serious and enduring harm experienced by victims.

Stakeholder engagement revealed broad agreement that systemic improvements require more than operational tweaks. Meaningful reform will likely depend on both cultural and legislative shifts. Questions under review include the ongoing suitability of the Fraud Act 2006 in addressing internet-enabled fraud and whether additional offences are needed to address the digital evolution of financial crime. The review is also examining how fraud cases are managed in criminal courts and whether more formalised public-private partnerships could enhance detection and enforcement.

Over 120 individuals—including prosecutors, judges, victims’ advocates, and tech sector representatives—have contributed to the evidence-gathering phase. As the review moves into its final stage, an expert panel will test and refine the recommendations. A full report, with a roadmap for reforming how the UK prevents, detects, and prosecutes fraud in the digital age, is expected by the end of the year.

“AI in Finance: Friend, Foe, or Both?” — Commissioner Kristin Johnson Explores Innovation, Oversight, and Enforcement

In a sweeping address at George Washington University, CFTC Commissioner Kristin Johnson delivered a compelling overview of artificial intelligence's evolving role in financial markets. She highlighted AI’s transformative potential—particularly in enhancing compliance, customer experience, and regulatory efficiency—while also warning of the risks that come with rapid adoption. Drawing from insights in an IMF paper and a GAO report, she detailed how AI is being used to detect fraud, streamline regulatory reporting, and power market surveillance tools.

Commissioner Johnson emphasised the use of AI in anti-money laundering and sanctions monitoring, noting that machine learning has greatly reduced false positives and improved risk detection. Financial firms are also leveraging AI to scan internal communications for red flags and to automate complex regulatory tasks. But the government isn’t standing still—US regulators like the CFTC, SEC, and FDIC are themselves adopting “suptech” to bolster oversight, uncover anomalies, and anticipate market disruptions.

However, Johnson didn’t shy away from AI’s dark side. She warned of the growing threat of “AI-washing”—firms exaggerating AI capabilities to mislead investors—and detailed recent CFTC enforcement actions, including a record $1.7 billion penalty against a fraudulent crypto scheme falsely marketed as AI-driven. She called for heightened penalties against those who misuse AI to commit fraud, and reiterated the importance of maintaining a technology-neutral yet robust legal framework.

Concluding her remarks, Johnson pushed for a coordinated, inter-agency approach to regulate AI in financial services. She advocated for the development of shared tools, standards, and guidance to both manage risk and foster innovation. In her words, AI is no longer the stuff of science fiction—it’s central to modern finance, and regulators must lead with vigilance, adaptability, and a clear-eyed view of its promise and peril.

Cyber Crime

Deepfake Fraud Surges as Detection Lags Behind: Why Verifying Authenticity is Critical in the AI Age

Now, to a blog post from the World Economic Forum on AI, deepfakes, and fraud. A staggering $25.5 million was stolen from engineering firm Arup in a deepfake video call that convincingly mimicked top executives—underscoring the dramatic rise in AI-driven fraud. This incident reflects a broader evolution in threat vectors: once tools of political misinformation, deepfakes are now used in sophisticated, targeted attacks on corporate operations, exploiting trusted relationships and digital communication.

The pace and accessibility of synthetic media creation have democratised fraud. In North America, deepfake-related scams surged by 1,740% between 2022 and 2023. With as little as 30 seconds of audio, scammers can produce realistic voice clones; video fakes take under an hour using free tools. Attempts to impersonate CEOs from firms like Ferrari and WPP underscore that no industry is immune.

Detection, however, remains deeply flawed. Current AI detection systems drop significantly in accuracy under real-world conditions, and human detection fares little better. Yet promising advances in multimodal tools—analysing voice, video, and behavioural cues in tandem—are achieving 94–96% accuracy in optimal settings. These systems, combined with cryptographic authentication and behavioural biometrics, are being integrated into financial platforms to detect fraud in real time.

Still, technology alone isn’t enough. The article advocates for a layered defence strategy: training staff to spot manipulation, establishing secure backchannels, mandating time delays on high-value transactions, and embracing a “never trust, always verify” culture. While legislation such as the EU AI Act mandates content disclosure and technical markings, a unified global approach remains nascent.

As AI-generated content grows more sophisticated, the article concludes, our ability to distinguish the real from the synthetic will define whether trust in digital communication is preserved—or permanently eroded.

Norway Becomes 51st Signatory to Cybercrime Convention’s Enhanced Cooperation Protocol

On 9th July 2025, Norway officially signed the Second Additional Protocol to the Convention on Cybercrime, marking a significant step in strengthening international collaboration against digital threats. Ambassador Helge Seland signed the treaty in Strasbourg, joined by Deputy Secretary General Bjørn Berge of the Council of Europe. This brings the total number of signatories to 51, with only two countries having completed ratification.

The Second Additional Protocol, opened for signature in May 2022, is designed to enhance cooperation and streamline access to electronic evidence across jurisdictions. It introduces innovative mechanisms such as direct engagement with registrars and service providers in other countries, and expedited procedures for emergency situations. Importantly, the protocol maintains robust safeguards rooted in human rights principles and data protection standards, ensuring legal and ethical integrity in cross-border investigations.