Financial Crime

Financial Crime 

The primary topic area of this month’s update is financial crime. We will look at the FATF updates on global ML/TF risk, including changes to country classifications, and look at the top four financial crime trends for 2023 as outlined in the State of Financial Crime 2023 report. Lastly, we will look at ASIC’s report on good practice for handling whistle-blower disclosures. 

FATF Update on Global ML/TF Risk 

FATF is the global group that sets international anti-money laundering and counter-terrorism financing (AML/CTF) standards, and in March AUSTRAC published two of their updates relating to international ML/TF risk. 

High-Risk Jurisdictions subject to a Call for Action (February 2023) Noting that the February 2020 call for action in relation to the Democratic People Republic of Korea, Iran, and Myanmar remain in effect.   
Jurisdictions under Increased Monitoring (February 2023) Listing the jurisdictions that have strategic deficiencies in their AML/CTF regimes and are actively working with the FATF to address them. These include: 
·       Albania 
·       Barbados 
·      The Cayman Islands 
·      Gibraltar 
·      Haiti 
·      Jamaica 
·      Jordan 
·      Mali 
·      Mozambique 
·      Nigeria 
·      Panama 
·      Philippines 
·      South Africa 
·      Syria 
·      United Arab Emirates 

NOTE: if any of your clients or products are associated with any country mentioned within either report (referenced below in full), please notify your Licensee and Compliance Manager immediately. 

For More Information 

High-Risk Jurisdictions subject to a Call for Action – 24 February 2023 ( 

Jurisdictions under Increased Monitoring – 24 February 2023 ( 

The State of Financial Crime 2023 

Comply Advantage, an AI driven fraud and AML risk detection organisation based out of the USA, has released a report based on a survey of 800 compliance decision makers within the financial services sector across the US, Canada, UK, France, Germany, Netherlands, Singapore, Hong Kong, and Australia. They identified the following key financial crime trends for 2023: 

Increase in Financial Crime Comply Advantage predicts that financial crime is set to soar as economies falter in 2023. They state that 59% of firms expect crime levels to rise, with 58% planning to hire more compliance staff. They indicate that a faltering economy could lead to increased levels of risk-taking behaviour.   
Fraud and Scams It is expected that frauds and scams will continue to evolve, with 41% of compliance teams surveyed indicating tax and investment fraud as being the top concern. They note the temptation for criminals to offer ‘market-beating returns’ schemes as the ability to access finance tightens, and the growing uses of social media platforms to seek investment guidance.   
Crowd Funding Comply Advantage report that 87% of compliance teams have noted an increase in the use of decentralised finance platforms, such as crowdfunding, to fund political extremism over the past 12 months. These deregulated platforms, in conjunction with cryptocurrencies and social media, increase the risk of terrorism financing by allowing groups to access platforms and crypto asset technology to gain support from followers and receive funds. Any provider working with crowdfunding services should perform enhance due diligence before agreeing to partnership, or risk being exposed to financial crime risks.   
Australia’s Focus When examining Australia as a nation, the State of Financial Crime 2023 report focused on the failure to bring Designated Non-Financial Businesses and Professions (DNFBP) into scope of AML regulations. It indicates that billions of dollars have been laundered through the Australian real estate sector alone, with AUSTRAC estimating that in 2020 AUS$1 billion was laundered by Chinese investors alone via Australian real estate. Australia is one of only 3 FATF countries that does not have DNFBP’s in the scope of AML/CTF legislation.  The report also indicates efforts by the Australian government to regulate crypto currency, AUSTRAC’s continued focus on investigating organisations that have issues with their AML/CTF program (such as NAB, ING Bank, Bell Financial Group, Crown Resorts, SportsBet and SkyCity Adelaide), and the AFP’s continued focus on Organised Crime. 

For More Information 

You can download the full report on the below link: 

The State Of Financial Crime 2023 

ASIC’s Whistle-blower Report 

In March, ASIC published a report to help entities to improve their process for handling whistle-blower disclosures, and to ensure that these processes are effective and encourage people to speak out. ASIC reviewed the whistle-blower programs of seven entities and have outlined the good practices they observed in REP 758. ASIC commissioner Danielle Press said:  

“Whistleblowing is a key part of a transparent, accountable, and safe work culture. Whistle-blowers need to know that, when they have reasonable grounds to suspect misconduct or an improper situation involving a firm, they can raise the issue without being victimised.” 

ASIC found that entities with a thoughtful and well-publicised program for protecting whistle-blowers and handling disclosures had greater opportunity to identify and address concerns and issues at early stages because they received useful reports and tip-offs from within the workplace. They have committed to reviewing whistle-blower policies and arrangements for handling whistle-blower disclosures, and they recently filed proceedings against TerraCom Limited for alleged whistle-blower victimisation. 

Please remember that you are obliged to handle whistle-blower disclosures confidentially and protect whistle-blowers from detriment.  Please take some time to review you Whistle-blower Policy to ensure you are fully aware of your obligations and processes. 

For More Information 

Report REP 758 Good practices for handling whistleblower disclosures ( 

23-045MR ASIC sues TerraCom Limited, its managing director, chief commercial officer, former Chair and a former director | ASIC 

GRC Essentials can help 

If you require any assistance, we can offer training for your personnel or a review of your compliance documents. Please don’t hesitate to contact us if you have any questions or if we can help you with any of your compliance matters. 

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