Latest news with #EnhancedDueDiligence
Finextra
6 days ago
- Business
- Finextra
FCA Issues Final Guidance on Politically Exposed Persons (FG25
A more proportionate, risk-based approach to AML compliance On 7 July 2025, the Financial Conduct Authority (FCA) published its finalised guidance FG25/3, updating how firms should treat politically exposed persons (PEPs) under the UK Money Laundering Regulations. This update follows a comprehensive multi-firm review, a public consultation (GC24/4), and recent amendments to the 2017 Money Laundering Regulations. The aim is to reinforce a risk-sensitive and proportionate approach to Enhanced Due Diligence (EDD) obligations, particularly when dealing with domestic PEPs, their family members, and close associates. The FCA's new stance reflects changes in UK legislation and encourages firms to reduce unnecessary friction during onboarding, especially for low-risk individuals. What's Changed and Why It Matters The FCA has made several important clarifications in this guidance. Most notably, the starting point for all firms should now be that UK PEPs present a lower risk than foreign PEPs, unless other risk factors are present. This principle should also apply to their family members and known close associates. This shift is intended to ease the experience of low-risk customers and avoid disproportionately burdensome checks, aligning with broader expectations under the Consumer Duty. The FCA also confirmed that non-executive board members (NEBMs) of UK civil service departments are no longer to be treated as PEPs. Similarly, the updated guidance includes a clearer definition of high-ranking military officials and limits judicial PEP classification to Supreme Court judges only. The Northern Ireland Assembly has been added to the list of devolved administrations, making it explicit that its members fall under the scope of national PEP definitions. Importantly, firms now have greater flexibility when approving PEP relationships. While approval from senior management remains mandatory, it no longer has to come from the Money Laundering Reporting Officer (MLRO) specifically. Instead, firms can designate other suitably trained senior staff, provided that the MLRO retains oversight of the process and ensures compliance with the FCA's standards and the firm's internal risk framework. A Smarter Approach to Risk Assessment The FCA reiterates that not all PEPs pose the same level of risk. The revised guidance introduces clear indicators for distinguishing between lower-risk and higher-risk PEPs. For example, UK politicians who hold no ministerial office, or those from countries with low corruption and transparent public institutions, may qualify for less intrusive EDD. In such cases, firms can rely on public records, internal data, or simplified documentation rather than conducting repeated or intensive reviews. In contrast, PEPs from countries with weak governance, high corruption levels, or opaque procurement processes may still warrant more stringent due diligence. These situations will require more detailed verification of source of wealth and funds, senior-level approvals, and ongoing monitoring. The guidance also clarifies that former PEPs must continue to be treated as such for a period of 12 months after leaving office. However, their family members and close associates may be declassified sooner, unless specific risk factors justify further scrutiny. The FCA encourages firms to monitor trigger events, such as elections, and suggests inviting customers to inform them of changes in circumstances to keep records current. Group-Wide Expectations and Cross-Border Challenges Firms headquartered in the UK are now expected to apply this risk-based, proportionate approach across all subsidiaries and branches, including those outside the UK, unless local law prohibits it. For foreign firms operating in the UK, the FCA expects compliance with UK Regulations for all business relationships within the UK. The FCA does not offer guidance on conflicts with non-UK legislation, but stresses that firms should be clear on how they resolve such discrepancies in line with their own risk frameworks. Family Members and Close Associates The updated guidance clarifies the definition of PEP-connected individuals. Spouses, civil partners, parents, children and their partners, and now siblings are all clearly included. Others, such as uncles, aunts or more distant relatives, should only be brought into scope if there's a justifiable reason based on the PEP's risk profile. Close associates remain those with joint business interests or known legal structures set up for a PEP's benefit. However, association alone does not make someone a PEP, and the guidance reinforces that such individuals should not be subject to automatic exclusion or excessive scrutiny. Practical Implications for Firms The finalised guidance emphasises the need for well-documented policies, appropriately trained staff, and clear, consistent risk assessments. Firms should avoid defaulting to a one-size-fits-all approach. Declining a business relationship on the basis of PEP status alone, without evidence of unmanageable risk, is unlikely to be considered appropriate, particularly in light of the FCA's expectations under Consumer Duty. If a firm chooses to apply enhanced measures beyond those required, this must be justified and proportionate, based on an individual's role, jurisdiction, or other contextual factors, not merely their status. This is a welcome recalibration of the FCA's expectations around PEPs. It aims to strike a better balance between financial crime prevention and fair customer treatment. Firms should now ensure that their PEP processes are aligned with the new guidance and consider how these updates impact both onboarding journeys and ongoing monitoring strategies. For those in compliance, legal, operations, or product, this is the time to review internal PEP policies, update delegation frameworks, and train relevant staff accordingly. The FCA's message is clear: proportionality, documentation, and risk-based judgment must be at the heart of your AML controls.
India Today
27-06-2025
- Business
- India Today
CBI raids 5 states in over 8 lakh mule accounts cyber fraud case, 9 arrested
The Central Bureau of Investigation (CBI) on Thursday launched a coordinated crackdown across five states as part of Operation Chakra-V, targeting mule bank accounts being used in large-scale cyber frauds. Acting on specific source information and following internal verification, the agency carried out searches at 42 locations in Rajasthan, Delhi, Haryana, Uttarakhand, and Uttar CBI arrested nine individuals during the operation. The accused include middlemen, bank correspondents, agents, aggregators, and account holders. All of them are being produced before the court, and the investigation remains investigation found that more than 8.5 lakh mule accounts were opened through over 700 branches of various banks across India. These accounts were either created without adhering to Know Your Customer (KYC) norms, customer due diligence, or initial risk assessments. During the raids, the agency seized a range of incriminating materials, including mobile phones, bank account opening documents, KYC records, transaction details, and other digital evidence. Officials identified several individuals involved in facilitating the opening of mule agency registered an enquiry to unravel the entire conspiracy behind the creation and use of these mule searches are part of an ongoing investigation into how organised cyber fraud networks are using mule accounts for digital arrest scams, impersonation frauds, fake advertisements, investment scams, and UPI-based financial CBI revealed that these operations are being aided by the deliberate or negligent actions of certain bank officials, agents, aggregators, e-Mitras, and other middlemen who help open and operate these fraudulent officials highlighted serious lapses by bank managers, including their failure to carry out Enhanced Due Diligence on suspicious transaction banks also neglected to send acknowledgement or verification letters to account holders, which would have helped confirm their physical addresses. These violations go against both RBI's Master Circular and internal bank the enquiry, the CBI registered a formal FIR invoking charges under the Indian Penal Code (IPC), Bharatiya Nyaya Sanhita (BNS), and the Prevention of Corruption Act. The offences include criminal conspiracy, cheating, forgery, and criminal misconduct by public investigation into the matter is underway.- Ends
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Business Standard
26-06-2025
- Business
- Business Standard
CBI busts 850,000 mule accounts in 700 bank branches across five states
The Central Bureau of Investigation (CBI) on Thursday said it had carried out searches at 42 locations across five states, discovering 850,000 mule accounts in more than 700 branches of various banks across India. A mule account, as it is popularly known, is a bank account used by scammers to move the proceeds of financial crimes. The searches, conducted under Operation Chakra-V, took place in Rajasthan, Delhi, Haryana, Uttarakhand and Uttar Pradesh. According to the investigative agency, the operation targeted the extensive use of mule bank accounts by organised cybercriminals to route and withdraw proceeds from fraudulent activities. 'These accounts were opened either without proper KYC (Know Your Customer) norms, Customer Due Diligence or Initial Risk Assessment. The branch managers of the banks have also failed to conduct Enhanced Due Diligence in respect of certain suspicious transaction alerts generated by the systems. Some of the banks have also failed to send the acknowledgement or thanking letters to customers to indirectly verify the addresses of the account holders,' the CBI said in a statement on its website. FIR filed against offenders, bank officials Based on the findings, the CBI has registered a First Information Report (FIR) under charges of criminal conspiracy, cheating, forgery and use of forged documents under the Indian Penal Code/Bharatiya Nyaya Sanhita, along with provisions under the Prevention of Corruption Act relating to misconduct by public servants. The investigation also highlights the alleged involvement of bank officials, agents, aggregators, middlemen and e-Mitras who assisted in the opening and operation of these accounts. During the raids, the agency seized digital evidence, account opening documents, transaction records, mobile phones and KYC materials. Nine individuals have been arrested so far, including middlemen, account holders and business correspondents who typically act as the bank's representatives in rural, underserved areas. They are accused of aiding in the creation and operation of mule bank accounts used to transfer and withdraw money obtained through cyber fraud.
Time of India
26-06-2025
- Business
- Time of India
CBI investigates banks for mule accounts used in cyber fraud
Jaipur: Banks in Rajasthan and many other states are under scrutiny following a Central Bureau of Investigation (CBI) operation targeting mule bank accounts used to facilitate cyber fraud . As part of Operation Chakra-V, CBI carried out coordinated raids Thursday across 42 locations in five states—Rajasthan, Delhi, Haryana, Uttarakhand, and Uttar Pradesh—to dismantle a network of cybercriminals who exploited bank accounts for digital scams, investment fraud, UPI-based frauds, and impersonation schemes. According to a CBI spokesperson, approximately 8.5 lakh mule accounts were opened across more than 700 bank branches nationwide. These accounts, often set up using forged documents or without proper Know-Your-Customer (KYC), Customer Due Diligence, or risk assessment, were used to siphon funds from unsuspecting victims. The investigation revealed that some bank managers bypassed Enhanced Due Diligence even when internal systems flagged suspicious transactions. Several banks failed to dispatch customer acknowledgement letters—an essential step in address verification—as mandated by the Reserve Bank of India. CBI has registered an FIR under sections covering criminal conspiracy, cheating, forgery, and use of forged documents along with charges of criminal misconduct under the Prevention of Corruption Act. The FIR names bank officials, agents, e-Mitras, aggregators, and middlemen as accused in facilitating opening of illicit accounts. During the searches, CBI teams seized digital data, mobile phones, account opening forms, transaction records, and KYC documentation. Nine individuals—comprising middlemen, agents, aggregators, account holders, and bank correspondents—were arrested for their roles in setting up and maintaining mule accounts used to launder cyber fraud proceeds.
Time Business News
18-06-2025
- Business
- Time Business News
Regulatory Trends: How Jurisdictions Are Embracing Banking Passports
VANCOUVER, British Columbia — The global financial ecosystem is undergoing a quiet but significant transformation. Amid tightening regulations, rising de-risking, and digital compliance automation, jurisdictions around the world are beginning to adopt the banking passport, not as a loophole, but as a legal instrument for facilitating global financial mobility. Amicus International Consulting, a global leader in legal identity structuring and offshore compliance, releases this in-depth analysis on the evolving regulatory landscape that is legitimizing and integrating banking passports into standard cross-border onboarding practices. What began as a necessity for politically exposed or geographically restricted individuals is now being formalized by forward-thinking regulators as a tool for de-bureaucratized banking, risk balancing, and inclusive financial access. The Banking Passport: A Legal Financial Identity Portfolio. At its core, a banking passport is a set of verified documents and jurisdictional structures that allow an individual or entity to: Open international accounts. Comply with Know Your Customer (KYC) and Enhanced Due Diligence (EDD) requirements. Operate across borders with fiscal legitimacy and transparency of risk. These typically include: A second citizenship or residency in a low-risk jurisdiction. A Tax Identification Number (TIN). A legally registered International Business Corporation (IBC). Proof of legal residence and address. Source of funds documentation and KYC compliance bundle. When properly constructed, banking passports provide a coherent and legally sound identity narrative that meets banks' increasingly algorithm-driven compliance demands. Why Governments Are Warming to Banking Passports. Historically, offshore financial identity tools have been viewed with suspicion. Today, three key trends are shifting that narrative: ✅ 1. De-risking and Overcompliance Since 2015, major banks have dropped clients in high-risk jurisdictions (including entire regions) to avoid compliance fines. This has left many legitimate users — mainly from Africa, Latin America, and parts of Asia — financially disenfranchised. Banking passports offer a way for these users to Acquire low-risk citizenship. Re-establish credibility under OECD-compliant documentation. Re-enter the financial system with precise risk segmentation. ✅ 2. CRS and FATCA Normalization: As more jurisdictions implement the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) regimes, governments recognize that identity fluidity is inevitable. By embracing structured multi-jurisdictional banking identities, they can: Retain high-net-worth individuals (HNWIs). Attract legitimate offshore business. Ensure tax compliance across mobility. ✅ 3. Fintech Inclusion and API-driven KYC Digital banks and payment providers now rely on API-driven KYC systems. Structured banking passports — with clean metadata, consistent identifiers, and digital proofs — integrate more easily into these systems than fragmented or outdated local documents. Case Study: Panama's Regulatory Upgrade Boosts Banking Passport Demand. In 2024, Panama passed reforms to its residency-by-investment program, aligning it with OECD substance rules and FATF guidelines. This made Panamanian tax residency and IBC ownership more attractive for banking passport strategies. Amicus clients using Panamanian structures saw: Reduced onboarding times in Singapore and Dubai. Higher acceptance rates with Swiss Tier-2 private banks. Faster crypto-fiat conversion access due to clearer documentation trails. Panama now markets itself as a 'mobility jurisdiction,' encouraging compliant multi-national individuals to base their financial identity legally in-country. How Jurisdictions Are Embracing Banking Passports: A Global Overview Jurisdiction Integration Strategy Portugal Golden Visa residents can use local residency and TIN for EEA banking UAE Recognizes residency-based banking passports for non-citizen clients Malta Citizenship-by-investment includes full banking compliance certification Dominica Offers digital banking onboarding for CBI holders Mauritius Encourages global TIN registration through Fintech Sandbox access Singapore Accepts structured offshore identities with FATF-aligned declarations These jurisdictions recognize that banking passports reduce onboarding friction, support compliance goals, and attract globally mobile capital. From Fringe to Framework: The Legal Normalization of Banking Passports. Over the past five years, multiple institutions and regulatory bodies have released guidance legitimizing multi-jurisdictional financial identities: OECD Tax Transparency Initiative (2022): Encouraged the harmonized use of TINs for globally mobile individuals. Encouraged the harmonized use of TINs for globally mobile individuals. FATF Recommendation 10 : Recognized risk-based onboarding using layered identity profiles. Recognized risk-based onboarding using layered identity profiles. Basel Committee (2023): Recommended flexible identity criteria for fintech inclusion. Amicus collaborates with regulators in emerging markets to create sandbox-compliant banking passport templates — pre-approved identity packages that meet the requirements of onboarding systems at scale. Case Study: African Startup Founder Uses Structured Identity to Bank Globally. A Kenyan fintech founder faced rejection from multiple payment platforms due to local Know Your Customer (KYC) limitations and nationality-based risk assessments. Amicus structured: A second passport through St. Lucia's donation program. A Singapore-based fintech holding company with tax transparency. A crypto wallet identity trail backed by financial statements. He now banks in Estonia, Hong Kong, and Mauritius — fully compliant and no longer limited by regional systemic bias. Digital-First Governments Are Leading the Way. Several jurisdictions are proactively embedding banking passport logic into their e-residency or digital identity frameworks: 🇪🇪 Estonia E-residency enables global entrepreneurs to obtain EU TINs, register EU companies, and access digital banking — all without requiring physical presence. 🇦🇪 UAE Free zones now accept 'banking passport profiles' for international account setup, provided TIN and tax domicile are clear. 🇺🇾 Uruguay Latin America's most progressive mobility jurisdiction, offering low-tax residency to banking passport holders, with automatic OECD alignment. Amicus is working with multiple ministries to develop Banking Identity Certification Platforms — government-backed identity attestations with blockchain verification layers. Second Citizenship: The Regulatory Pivot Point. The backbone of many banking passports is a second citizenship. Countries embracing this as part of their financial inclusion strategy are: Country Program Type Regulatory Notes Antigua & Barbuda Citizenship by donation Full FATF compliance, aligned with EU blacklist avoidance St. Kitts & Nevis Real estate and donation-based CBI Includes banking letter and TIN upon approval Malta Exceptional Investment Naturalization Includes EU TIN, passport, and tax planning module Vanuatu Citizenship via offshore escrow Working to meet AML targets under FATF pressure Each of these programs has begun pre-validating clients through compliance units — making their documents easier to integrate into offshore banking platforms. Regulators Benefit from Embracing Banking Passports. When jurisdictions adopt structured banking identities, they gain: Increased capital inflows through residency and citizenship programs. through residency and citizenship programs. Improved tax revenue through declared TINs and economic substance. through declared TINs and economic substance. Enhanced AML oversight via pre-vetted, centralized identity portals. via pre-vetted, centralized identity portals. Reputation boost among private banking and fintech institutions. Instead of blocking mobile clients, these jurisdictions attract them with rules that protect both the client and the system. Case Study: A Political Risk Insurance Broker Uses Dual Identity to Navigate Sanctions. A Belarusian insurance professional found that his nationality placed him under enhanced sanctions screening, despite never being politically active. With Amicus: He secured dual citizenship in Dominica. Used his new nationality to register a brokerage in Cyprus. Filed a new TIN under the European framework. His banking passport enabled him to clear risk assessments and open brokerage escrow accounts in Switzerland and the UAE — legally, with the cooperation of the relevant regulators. Looking Ahead: Global Banking Identity Registries Amicus predicts that jurisdictions will soon participate in cross-certified banking identity registries — cloud-based or blockchain-backed repositories of: TINs KYC files Economic substance certificates Risk assessments. These registries will Expedite onboarding for clients with banking passports. Allow institutions to validate multi-jurisdictional structures instantly. Lower the compliance cost for both banks and clients. Best Practices for Clients and Policymakers. For clients: Avoid inconsistent documentation across jurisdictions. Ensure your banking passport aligns with the CRS and FATCA requirements. Use government-sanctioned programs for second citizenship or residency. Maintain clear source-of-funds documentation. For governments: Recognize banking passports as compliance tools, not evasion risks. Create centralized identity certification units. Partner with platforms like Amicus to design sandbox models. Align residency programs with OECD and FATF standards. Conclusion: The Banking Passport Is Now a Global Norm — Not a Grey Zone. Jurisdictions that once viewed banking passports as threats are now building infrastructure around them. As the world continues to fragment politically and digitize financially, structured legal financial identities are no longer just a workaround — they are the future. Amicus International Consulting helps clients and governments design that future with integrity, compliance, and financial sovereignty at the center. 📞 Contact InformationPhone: +1 (604) 200-5402Email: info@ Website:
