Understanding anti-money laundering for Australian regulated entities

Australia has been an outlier in AML for some time. Many accountants, lawyers and real estate agents who would be captured by AML requirements in Europe or the UK have been exempted from these requirements which are commonplace in other parts of the world. New Zealand has been updating its AML requirements on regulated entities for a number of years with no sign of backtracking. While Australia will hope to avoid some of the implementation mistakes made across the Tasman Sea, it does seem that this time, increased AML regulation in Australia is coming. 

Fortunately, Australian firms are in a strong position to learn from what regulated entities in the UK and Europe have been doing since at least the Fourth Directive was ratified by the EU in 2015. With years of experience in supporting the regulated sector to understand and comply with seemingly complex money laundering regulations, VinciWorks is here to demystify the changes and reassure the Australian regulated sector that things are going to be okay.

What will the most difficult changes be for Australian firms to grasp?

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Our new survey reveals a crack in business preparedness for the upcoming EU Artificial Intelligence (AI) Act. The survey exposes alarmingly low awareness among larger organisations, with only 2% of large companies reporting a full understanding of the Act.

While the EU AI Act is not yet formally passed (expected to come into force in 2025), it’s anticipated to significantly impact organisations operating in the EU. The Act aims to regulate the development, deployment, and use of AI to ensure it’s fair, safe, and trustworthy.

Non-compliance can lead to substantial penalties, reaching up to €35 million or 7% of global turnover, whichever is higher.

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How to assess geographic risks of proliferation financing

Regulated entities are required by law to carry out proliferation financing (PF) risk assessments. But this relatively new compliance requirement can be hard to fully integrate into your risk assessment process. At first glance, proliferation financing risks are mainly concerned with activities carried out in North Korea and Iran. If your business doesn’t have a connection with either of these countries, then it might seem there is little more to do in a proliferation financing risk assessment.

But in reality, proliferation financing risks are connected to more countries than just North Korea and Iran, and firms should factor this into their risk assessment processes. However PF risks are constantly evolving. As global concerns on the proliferation of weapons of mass destruction (WMD) evolve, it is vital to broaden the risk assessment process to ensure your firm is not caught out.

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Wednesday 10 April 12pm UK

Neurodiversity is becoming more understood as a workplace issue.

As many as 1 in 7 people in the UK are neurodivergent, meaning that organisations that fail to meet the needs of their neurodivergent staff and clients are neglecting a significant demographic. Although there are challenges associated with these differences, there are also many strengths.

At the same time, failing to make workplaces inclusive of neurodiversity is an increasing risk. Over a hundred cases of neurodiversity discrimination were taken to employment tribunals last year, with almost none the year before.

Organisations that fail to put in place the right policies and procedures to support neurodivergent staff are at risk of losing talented staff, as well as the risk of legal action. Making a workplace that is neurodiversity friendly doesn’t have to be complicated or expensive.

In this webinar, we’ll look at what neurodiversity is, strategies to support neurodivergent staff at work, and what policies and procedures organisations should have in place.

This one-hour session will cover:

– What is neurodiversity and what are different neurodivergent conditions?
– The challenges faced by neurodivergent staff at work
– Strategies to support and encourage diversity of thought at work
– Short workplace scenario clips on how organisations can support neurodivergent people
– Supporting neurodivergent staff in the workplace
– Creating policies and procedures inclusive of neurodiversity

Wednesday 03 April 12pm UK

Since 1 April 2023, all firms in the regulated sector have been required to carry out proliferation financing (PF) risk assessments.

This applies to all regulated entities, from law firms to financial services, casinos to cryptocurrency.

Regulated entities can create a new risk assessment on proliferation financing or incorporate PF risks into existing AML and terrorist financing risk assessments. However, regulators expect firms to take action to understand the risk of PF and how to mitigate it in their business. Failing to do so can result in a breach of the Money Laundering Regulations.

One year into this new requirement on the regulated sector, how effective have the new regulations been? What are the key strategies for compliance, and what are the best practice tips for ensuring PF obligations are met? In this webinar, we’ll look at the issue of proliferation financing in detail, discuss strategies for compliance, and share best practices for understanding and mitigating PF risks.

This one-hour session will cover:

– What proliferation financing is and the jurisdictions and industries at risk
– The differences and similarities between proliferation financing, money laundering and terrorist financing
– Practical examples of how proliferation financing can happen
– Proliferation red flags and high risk indicators
– Strategies and technologies to counter the risk of proliferation financing
– How to undertake a proliferation financing risk assessment

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A financial columnist fell victim to a group of con artists and ended up giving them her life savings. Can this happen to you?

Charlotte Cowles is not the kind of person to fall for a scam. She’s a financial writer, the financial advice columnist for New York Magazine and has worked for some of the top publications in the US. She lives in Manhattan, is married and has a child. 

And yet, as she writes in this story, she found herself one day on a street in New York City giving a stranger in a Mercedes a shoebox filled with $50,000 in cash, nearly all her savings.

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All goods in the Common High Priority List are under trade sanction, meaning handling them is like handling stolen goods. Companies across the supply chain, from logistics to warehouses to shipping, could be breaking the law if they end up involved with these goods that later end up used by Russia, or in fact any sanctioned country.

There are a number of red flags to be aware of when dealing with sanctioned items, and where there is a risk of a sanctions breach. A single red flag is not necessarily indicative of illicit or suspicious activity. The surrounding facts and circumstances should be considered before determining next steps, like submitting a suspicious activity report to the NCA.

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FCA warns firms to do better on risk assessments and training

The Financial Conduct Authority (FCA) has warned over 1,000 Annex 1 firms (lenders, money brokers and financial leasing companies), about serious money laundering failings at the most basic level.

The FCA has written to these firms, making it clear that firms should “complete a gap analysis against each of the common weaknesses we have outlined within six months.” The FCA’s letter also says that in future engagements with the FCA, they expect to be provided with the findings from the gap analysis, the gaps identified, and the progress towards effective policies, controls and procedures. Failing to do so could result in regulatory action. 

The FCA’s review of financial crime controls revealed widespread weaknesses across various areas. Firms were found to be inconsistent in reporting their activities to the FCA, failing to adapt their controls to accommodate business growth, and lacking proper risk assessments. Additionally, the FCA identified shortcomings in due diligence procedures, ongoing monitoring, and the documentation of financial crime-related decisions. The review also highlighted a lack of resources and inadequate training provided to staff, alongside insufficient oversight from senior management. 

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