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31 May 20223 minute read

Anti-Money Laundering Bulletin: Spring/Summer 2022

DLA Piper’s Financial Services Regulatory team welcomes you to the spring/summer 2022 edition of our Anti-Money laundering (AML) Bulletin. In this issue, we provide updates on AML developments in the UK, the US and internationally. 

In this issue:

The Economic Crime (Transparency and Enforcement) Act: What does it mean for commercial real estate?

The Economic Crime (Transparency and Enforcement) Act (the Act) was first introduced to Parliament as a Bill on March 1, 2022 and received Royal Assent on March 15. Fast-tracked as part of the government's response to the Ukraine conflict, which has given rise to an increased focus on the ownership of UK property by people potentially subject to sanctions, the Act will have a significant impact on commercial real estate.

Further FCA AML failings identified in challenger banks

Following the FCA’s flurry of activity in 2021 and its recently announced 2022/23 Business Plan on April 7, 2022, the FCA has published findings of its multi-firm review into the financial crime controls of challenger banks.

UK financial regulatory authorities publish joint statement on sanctions and the cryptoasset sector

On March 11, 2022, the Financial Conduct Authority (FCA) published a joint statement, with the Bank of England (BoE) and the Office of Financial Sanctions Implementation (OFSI), regarding the implementation of the latest sanctions against Russia in the cryptoasset sector (Joint Statement).

FCA begins consultation on use of ‘side pockets’ for retail funds with Russian, Ukrainian or Belarusian exposure

The FCA has launched a consultation with the industry regarding the use of “side pockets” in dealing with sanctioned assets. Fund managers are currently facing significant challenges in valuing and selling Russian, Belarusian and Ukrainian assets. As a result, the FCA is considering permitting the segregation of these illiquid assets by designating them to a side pocket account.

Latest sanctions block Russia’s largest banks, cyber actors and more; Biden’s executive order prohibits investments in Russia by US persons

On April 6, 2022, the White House announced a new Executive Order banning new investment in the Russian Federation and an array of additional blocking sanctions targeting Russian financial institutions, elites and cyber actors.

FATF report on state of effectiveness and compliance with FATF standards and Moneyval statement

On April 19, 2022, the Financial Action Task Force (FATF) published its report on the state of global efforts to tackle money laundering, terrorist and proliferation financing. The report noted that 76% of countries have now satisfactorily implemented the FATF’s 40 Recommendations, which is a significant improvement in technical compliance with laws and regulations compared with the figure of 36% from 2012.