Episode 197

27th October – 30th October 2025

Sanctions 

US Sanctions Colombian President Gustavo Petro and Inner Circle Over Drug Trade Allegations 

On 24th October 2025, the US Treasury sanctioned Colombian President Gustavo Petro, his wife, son, and Interior Minister Armando Benedetti, accusing them of enabling drug cartels and contributing to record cocaine production under Petro’s “Total Peace” plan. The sanctions, issued under Executive Order 14059, freeze US-based assets and bar transactions with designated individuals. Petro, Colombia’s first left-wing president, denounced the move as politically motivated and vowed to contest it, escalating tensions with President Trump amid broader disputes over immigration, narcotics policy, and regional security. The State Department press release is here. 

OFSI Updates Humanitarian Licence for Israel, Palestine, and Lebanon: Extended Scope and Terminology Revisions 

On 27th October 2025, the UK’s Office of Financial Sanctions Implementation (‘OFSI’) amended General Licence INT/2023/3749168 to support humanitarian activity in Israel, Palestine, and Lebanon. Key changes include a two-year extension of the licence’s validity, revised reporting deadlines set for December 2026 and 2027, and updated terminology, replacing “The Occupied Palestinian Territories” with “Palestine” and removing references to “the conflict” to ensure geographic specificity. The definitions of “Relevant Person” and “UK Funded Person” were broadened, with the latter now covering individuals funded by the UK government within the past five years. Users are advised to consult the full licence for detailed permissions and compliance requirements. 

Fraud 

£629 Million Lost to Fraud in First Half of 2025, UK Finance Reports 17% Surge in Cases 

UK Finance’s Half Year Fraud Report 2025 reveals a troubling rise in both the volume and value of fraud across the UK. In the first six months of the year, criminals stole £629.3 million through 2.09 million confirmed cases of authorised and unauthorised fraud, which is a three per cent increase in financial losses and a striking 17 per cent rise in case numbers compared to the same period in 2024. The data signals a shift in fraud patterns, with unauthorised frauds continuing to climb, reversing last year’s trend of declining authorised payment fraud. The report underscores the growing urgency for coordinated prevention and consumer protection strategies. 

Starling Unveils AI Scam Detector to Shield UK Shoppers from Online Fraud 

Starling Bank has launched Scam Intelligence, a pioneering AI-powered tool which helps users detect fraud on platforms like Facebook Marketplace, eBay, Vinted, and Etsy. Built with Google’s Gemini chatbot and Google Cloud, the tool analyses images and messages from sellers to flag suspicious pricing, generic photos, mismatched bank details, and pressure tactics. During testing, it tripled the rate of cancelled payments, suggesting users were more cautious before buying. UK fraud minister Lord Hanson praised the initiative as a “brilliant example” of industry-led AI protection, amid record losses to purchase frauds in 2025. 

Europol Calls for Urgent Action on Caller ID Spoofing Amid €850 Million Global Losses 

In a new position paper, Europol warns that caller ID spoofing is fuelling widespread financial fraud and social engineering frauds, with estimated global losses reaching €850 million annually. Criminals exploit phone calls and texts to falsify caller identities, deceiving victims into trusting fraudulent communications. The paper urges a coordinated international response, outlining technical safeguards, regulatory reforms, and cross-border collaboration to protect citizens and support law enforcement efforts across Europe. 

HSBC Sets Aside £826m After Losing Appeal in Madoff Fraud Case 

HSBC will book a $1.1 billion (£826m) provision in its third-quarter results following a Luxembourg court ruling in a long-running lawsuit tied to Bernard Madoff’s Ponzi scheme. The case, brought by Herald Fund SPC, accused HSBC’s Luxembourg arm of custodial failures linked to lost cash and securities. While the court upheld HSBC’s appeal on the cash restitution claim, it rejected the appeal concerning securities, prompting HSBC to pursue a second appeal. The financial hit adds pressure to HSBC’s capital reserves, already strained by its $13.6 billion plan to privatise Hang Seng Bank and other recent write-downs. 

How Privacy-Enhancing Technologies Are Helping Banks Combat Fraud Without Compromising Data – A World Economic Forum Insight 

A recent article on the World Economic Forum (‘WEF’) website explores how privacy-enhancing technologies (‘PET’s) are enabling banks to collaborate in the fight against fraud without compromising customer privacy. With fraud losses in the US alone exceeding $12.5 billion in 2024, PETs such as data clean rooms allow institutions to detect patterns like mule accounts and synthetic identities by sharing encrypted insights rather than raw data. The article highlights practical uses such as early alerts and cross-bank ID checks, stressing that PETs securely protect consumers and uphold data sovereignty. 

Money Laundering 

FATF Plenary Advances Asset Recovery, AI Risk Scanning, and Removes Four Nations from Watchlist 

The October 2025 Financial Action Task Force (‘FATF’) Plenary in Paris marked a pivotal moment in global efforts to combat illicit finance. Under the Mexican Presidency of Elisa de Anda Madrazo, delegates from over 200 jurisdictions convened to advance strategic initiatives, including asset recovery, AI risk mitigation, and mutual evaluations. The meeting reinforced FATF’s commitment to depriving criminals of their ill-gotten gains and enhancing international financial integrity. 

A major outcome was the removal of Burkina Faso, Mozambique, Nigeria, and South Africa from FATF’s “increased monitoring” list. These jurisdictions successfully completed their Action Plans addressing deficiencies in anti-money laundering, counter-terrorism financing, and proliferation financing. Each will continue working with their respective regional bodies to sustain progress, with South Africa maintaining coordination directly with FATF. 

The Plenary also adopted the first mutual evaluation reports under FATF’s new time-bound, risk-based framework. Belgium and Malaysia were assessed for their effectiveness in tackling money laundering and related threats. Their reports, due for publication in December 2025, will include tailored roadmaps for strengthening national safeguards within three years. 

In a forward-looking move, FATF approved new guidance on asset recovery, aiming to close global loopholes and improve cross-border confiscation of criminal proceeds. This guidance is part of a broader push to make crime unprofitable and enhance international cooperation. 

Recognising emerging threats, FATF launched a Horizon Scan focused on generative AI and deepfakes. The initiative warns of how criminals may exploit these technologies for cyber fraud and other illicit activities. Case studies will be shared to help public and private sectors bolster their defences while responsibly harnessing AI. 

The Plenary also welcomed Jamaica and Nigeria to its meetings under the Guest Initiative, joining Kenya in expanding regional representation and cohesion across the Global Network. Meanwhile, Russia’s suspension from FATF membership remains in effect, reaffirming the body’s stance on compliance and accountability. 

Bribery and Corruption 

Cayman Watchdogs Demand Tougher Anti-Corruption Powers at Post-Election Summit 

At the October 2025 post-election seminar hosted by the Cayman Parliament and Commonwealth Parliamentary Association, Cayman’s top integrity bodies called for stronger enforcement powers to curb misconduct among public officials. Woody Foster of the Commission for Standards in Public Life criticised weak accountability mechanisms, noting difficulties in penalising officials who fail to declare outside interests. Elisabeth Lees of the Anti-Corruption Commission emphasised the global nature of corruption and highlighted recent prosecutions, including fraud in vehicle licensing and a $1.54 million football scandal. Delegates from Bermuda, Scotland, and Jersey echoed the need for robust oversight frameworks to uphold public trust. 

Market Abuse 

ESMA Elevates Cyber Resilience and ESG Scrutiny as 2026 Supervisory Priorities 

The European Securities and Markets Authority (‘ESMA’) has announced that cyber risk and digital resilience will lead its Union Strategic Supervisory Priorities for 2026, aligning with the Digital Operational Resilience Act (‘DORA’) to bolster ICT risk management across EU financial markets. National regulators are urged to intensify oversight and coordination to ensure robust implementation. Alongside this, ESMA will consolidate its supervisory work on ESG disclosures, targeting high-risk areas to combat greenwashing and strengthen sustainable investment practices. Additional supervisory themes may be introduced as emerging risks are identified. 

Other Financial Crime 

Former Trader sues UBS for $400m, Alleging Scapegoating in Libor Scandal 

Tom Hayes, the former UBS and Citigroup trader once dubbed the “ringmaster” of the Libor rate-rigging scandal, is suing UBS for $400 million in a Connecticut court, alleging malicious prosecution and reputational destruction. After serving over five years in prison, Hayes had his conviction overturned by the UK Supreme Court in July 2025, which found the trial unfair due to judicial misdirection. Hayes claims UBS orchestrated a flawed internal investigation to shield senior executives, presenting him as a scapegoat to regulators in both the US and UK. He seeks damages for lost liberty, career, and health, and pledges to support justice reform charities if successful. 

Global Experts Unite to Combat Crypto-Enabled Crime with Stronger Standards and Cooperation 

At the 9th Global Conference on Criminal Finances and Cryptoassets, held in Vienna and co-hosted by Europol, UNODC, and the Basel Institute on Governance, over 1,250 participants emphasised the urgent need for harmonised standards, deeper cross-sector collaboration, and enhanced capacity to counter increasingly sophisticated criminal use of cryptoassets. The event spotlighted transnational frauds, money laundering, and terrorism financing, while highlighting successful cross-border operations and stressing the importance of public-private partnerships, faster inter-agency coordination, and specialised training to trace and recover illicit crypto funds. 

Cybercrime 

UK and Singapore Launch Global Guidance to Shield Supply Chains from Ransomware Threats 

At the 2025 Counter Ransomware Initiative Summit, the UK and Singapore unveiled new international guidance to help organisations fortify their supply chains against ransomware attacks. Backed by 67 member states, the guidance outlines practical steps for identifying and mitigating vulnerabilities in supplier networks, aiming to prevent the kind of widespread disruption seen in recent high-profile cyber incidents. The initiative underscores the growing global consensus that cybersecurity is a shared responsibility, with the UK also pledging to sign the UN Convention against Cybercrime to enhance cross-border cooperation and criminal accountability. 

UN Cybercrime Convention Opens for Signature in Historic Hanoi Ceremony 

On 25th October 2025, 72 nations signed the UN Convention against Cybercrime in Hanoi, marking the launch of the world’s first global treaty to combat cybercrime. Adopted by the UN General Assembly in December 2024, the Convention establishes international standards for electronic evidence, criminalises cyber-dependent and online exploitation offences, and introduces a 24/7 cooperation network. It emphasises capacity building for developing countries and recognises the non-consensual sharing of intimate images as a criminal act. The treaty will enter into force once ratified by 40 signatories, heralding a new era of multilateral defence against digital threats. 

EU Signs Landmark UN Cybercrime Convention to Boost Global Cooperation 

The European Commission has signed the United Nations Convention against Cybercrime on behalf of the EU, marking a major step in global efforts to combat digital threats. Signed in Hanoi, Viet Nam, the convention establishes international standards to tackle cybercrime, including child sexual abuse, online fraud, and ransomware, while safeguarding fundamental rights. It enables cooperation with 112 UN Member States not party to the Budapest Convention, bridging a critical gap in global enforcement. Negotiated by the Commission between 2019 and 2024 and adopted by the UN General Assembly in December 2024, the convention includes provisions for extradition, electronic evidence sharing, and capacity building. Its entry into force depends on ratification by 40 countries, with EU Member States proceeding through national procedures following Council and European Parliament approval.