The art world has appears to be a key place of money laundering with its lax regulations and use of middlemen.
The biggest Nordic banks are now looking to axe jobs that were made in a hiring spree in order to improve their compliance. 1000 of these jobs are now on the line as the banks look towards automation; and a Mastercard exec has been implicated in money laundering coverup.
See below for more on these stories.
The art world has a money laundering problem
According to a bipartisan Senate investigation released on Wednesday, the art world is considered to be the largest legal unregulated industry in the United States.
The industry is made of up shell companies with hidden owners, middlemen who shield the identities of buyers and sellers and inadequate safeguards to keep out shady money.
The Senate report details how a pair of Russian oligarchs with ties to Russian President Vladimir Putin allegedly seized on the secrecy of the art industry to evade sanctions by making more than $18 million in high-value art purchases, which is just the tip of the iceberg.
“Secrecy, anonymity, and a lack of regulation create an environment ripe for laundering money and evading sanctions.”
This is not new news – in Europe, The Fifth Money Laundering Directive addressed the issue of money laundering in art earlier this year. The revised directive now requires art dealers whose transactions exceed €10,000 or more to perform a risk-based approach towards anti-money laundering and carry out the relevant due diligences.
Nordic Banks Plan Job Cuts as Compliance Units Face Overhaul
The biggest Nordic banks are taking a long hard look at their compliance units after a recent hiring spree.
The banks initially ramped up compliance so fast they weren’t able to focus on efficiency in those departments. The job cuts come as humans are “simply too expensive” compared to algorithms, and the automation of processes is simultaneously going to improve the quality of work.
Why aren’t banks consulting RegTech firms to help facilitate a quick transition to automated processes, in order to prevent mass job cuts due to shaky decision making from the top?
Mastercard Exec Reportedly Linked to Suspicious Transactions at Cyprus Bank
The controversial Wirecard has once again been implicated in alleged criminal activities - this time by a Mastercard executive at the troubled FBME bank in Cyprus.
FBME is reported to have ties to Wirecard via an unnamed key client, which has itself recently become mired in its own scandal after being unable to account for a missing $2.1 billion in cash on the company books.
At FBME, an unnamed Mastercard executive has been accused by private investigators of a money laundering cover-up using a system of “phantom transactions” designed to thwart detection by Visa and Mastercard’s anti-fraud and money-laundering checks.
A Mastercard spokesperson has said that none of the alleged links between FBME and Wirecard have been proven, but they “maintain a rigorous enforcement process” for payment processors, which can involve fines and/or the suspension of licenses.
This case proves that the fight against money laundering is difficult, even more so when institutions are having to battle their own employees who are facilitating criminal activity.
Need help with your AML measures?
Feel free to get in touch with one of our experts or request a demo to see our award-winning systems in action.
