Mauritius Compliance news
Mauritius Arrests Former Finance Minister and Central Bank Governor in Embezzlement Case
Mauritian authorities arrest former Finance Minister, Renganaden Padayachy and former Central Bank Governor, Harvesh Seegolam as part of an embezzlement investigation, amassing 300 million Mauritius rupees (approximately $6.7 million).
The alleged misuse of funds is linked to the Mauritius Investment Corporation, a state-owned company established to assist companies with the challenges brought on by the COVID-19 pandemic.
The arrests are part of broader reforms initiated by the current government, led by Prime Minister Navin Ramgoolam. The two arrested individuals were part of the previous administration, in which an audit of public finances was conducted.
UAE Compliance news
Havyn Group – ex CEO fined over $12m by Abu Dhabi Regulator
The Financial Services Regulatory Authority (FSRA) at ADGM has fined Hayvn Group’s former CEO Christopher Flinos (and any related parties) $8.85 million following an investigation into significant regulatory violations. A subsequent investigation into the SPV – Special Purpose Vehicle, AC Holding, its sole shareholder and Flinos led to another $3.6 million fine.
The serious violations included unauthorized virtual asset activity, fraudulent schemes, provision of false information and forgery of company documents. The FSRA commented ‘It failed to establish and maintain adequate systems and controls to manage its operations and risks, as well as to recognise and record all of its client relationships, breaching the FSRA’s Anti-Money Laundering (“AML”) requirement’.
As a result, Hayvn’s ADGM’s Financial Services Permission (FSP) was revoked and Flinos was banned indefinitely from ADGM’s financial services. The FSRA emphasized strict action will be taken against any individual or entity that violates their regulations.
Source:(Gulf news) Hayvn Group, its ex-CEO fined $12m plus by Abu Dhabi regulator
UAE Ministry Signs MoUs to Strengthen Anti-Money Laundering Effort
The UAE Ministry of Economy has entered into new Memorandums of Understanding (MoUs) with various national bodies, including the Dubai Land Department (DLD) and the Economic Security Centre of Dubai (ESCD).
This effort aims to reinforce national initiatives by developing a solid regulatory framework that promotes integrity and transparency in order to tackle financial crimes in the UAE.
These agreements are aimed at improving cooperation, enhancing data-sharing mechanisms and aligning the Ministry’s practices with international compliance standards.
Bank Fined for Breaching Anti-Money Laundering Law in the UAE
A bank operating in the UAE has been fined by (CBUAE) the Central Bank of the UAE following a regulatory inspection. The bank failed to adhere to Article 14 of the Federal Decree Law No. (20) of 2018 concerning Anti-Money Laundering, Combating the Financing of Terrorism and the Financing of Illegal Organizations.
The CBUAE oversees and regulates banks operating in the UAE to ensure they follow the country’s guidelines and regulations to protect the integrity of the financial system.
Source: https://www.dubaieye1038.com/news/local/bank-fined-for-violating-uaes-anti-money-laundering-law/
Global Compliance news
EY Fined nearly £5 Million Over Thomas Cook Audit Failures
Financial Reporting Council (FRC) has fined EY almost £5 million for serious audit deficiencies related to Thomas Cook’s 2017 and 2018 finances, seeing that it was at an unstable financial position at the time.
The breaches involved insufficient review of the company’s goodwill valuation and its ability to continue operating, prior to its collapse in 2019. EY admitted to the audit lapses and cooperated during the investigation which led to a reduction in their penalty. They ensured that high quality audits remain their priority.
Source: EY fined almost £5m for Thomas Cook auditing failures | The Independent
Block Inc. Fined $40 Million for Cash App Money Laundering Allegations
New York’s financial services regulator has fined Block Inc. $40 Million for failing to prevent money laundering activities on Cash App, its mobile payment service. The regulator investigated significant oversights in Block’s Bank Secrecy Act, Anti-Money Laundering and KYC (know-your-customer) programs.
The company was found to have inadequate customer due diligence and risk-based controls to prevent criminal activities such as money laundering and terrorism financing. There appeared to also be a lack of control in its bitcoin transactions via Cash App in 2018.
An internal audit by the regulator in 2022 showed that 8359 Cash App Accounts were affiliated to a Russian criminal network. Block has agreed to pay $80 million in civil fines charged by 48 U.S state financial regulators.
Source:(USA Today) Block hit with $40M fine for money laundering oversight on Cash App
Kenya Expands Anti-Money Laundering Rules to Precious Metal Dealers
Kenya’s new way to combat money laundering and terrorism financing is to target precious metal and stones traders, requiring them to register with the Financial Reporting Centre (FRC). This response comes after Kenya was grey-listed by the Financial Action Task Force (FATF) in 2023.
Non-compliant traders now face license reviews or suspension for failing to register with the FRC. New policies require the dealers to report cash transactions above $15,000 since they are prone to corruption, money laundering and terrorism financing.
Kenya’s National Assembly has proposed changes to the Proceeds of Crime and Anti-Money Laundering Act to subject precious metal and stones dealers to the same reporting obligations as banks and other financial institutions.
Source: Kenya takes money laundering war to precious metal dealers – The EastAfrican
Zimbabwean Socialite Linked to South African Money Laundering Probe
South African regulators are investigating a Johannesburg printing company Ren-Form over alleged money laundering associated with a corruption scandal in Zimbabwe.
Ren-Form was working with Wicknell Chivayo, a politically connected Zimbabwean businessman to supply overpriced election materials to Harare, Zimbabwe.
A leaked report from South Africa’s Financial Intelligence Centre (FIC) reveals Ren-Form received over R1 billion from Zimbabwe’s Ministry of Finance and Economic Development, with over R800 million transferred to Chivayo’s business bank accounts.
The FIC also found payments worth R36.5 million from Chivayo’s Standard Bank account between 2023 and 2024 to have been spent on ‘cars’. The report also notes payments by Zimbabwe’s Finance Ministry worth R157 million to Chivayo’s South African firm, Edenbreeze, even after Zimbabwe’s Anti-Corruption Commission began its probe. It has since been paused.
Absa Fined R10 Million Over AML Monitoring Failures
The Prudential Authority of the South African Reserve Bank has fined Absa Bank R10 million for failing to adequately review certain high-risk clients, including politically exposed persons, foreign prominent public officials and domestic prominent influential persons.
Under the Financial Intelligence Centre Act (FICA), banks must closely monitor such individuals as well as their immediate family and close affiliated given their elevated risk of association with money laundering and related financial offenses.
The bank was also cited for delays in responding to alerts generated by its automated transaction monitoring systems for suspicious activity.
Source: https://www.sabcnews.com/sabcnews/absa-fined-r10-million-for-monitoring-failures/
US Tiger and TradeUP fined $950,000 by FINRA over AML failures
FINRA has fined affiliated firms US Tiger Securities and TradeUP Securities a total of $950,000 for anti-money laundering (AML) violations. The firms, owned by an offshore holding company, serviced omnibus accounts for foreign financial institutions trading in thinly traded, low-priced securities.
FINRA found that from 2019 to 2023, their AML programs were inadequate for detecting suspicious activity and they failed to conduct proper due diligence on correspondent accounts.
Revolut fined €3.5 million over failure in money-laundering prevention
Lithuania’s central bank has imposed a €35 million fine on a British fintech company Revolut for deficiencies in its anti-money laundering practices.
The company failed to adequately monitor business relationships and operations, leading to inadequate identification of suspicious transactions.
Revolut stated that the investigation did not uncover any confirmed cases of money laundering and the findings focused on enhancing its existing control measures. They have cooperated with authorities and are addressing the procedural issues identified.
Source: Lithuania fines Revolut 3.5 million euros for money-laundering prevention failures | Reuters
Mobile Money Giant Faces L$25M Fine for Non-Compliance
The Financial Intelligence Agency (FIA) of Liberia has fined Lonestar Cell MTN Mobile Money, Inc. (LCMMMI) L$25 million for multiple violations of the country’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws.
A risk-based inspection conducted in September 2024 revealed critical compliance failures, including the inadequate due diligence on agents, unauthorised transaction thresholds and failure to monitor and report suspicious activity.
These issues, some dating back to 2018, contributed to vulnerabilities such as a 2023 Ponzi scheme. The FIA has ordered the fine to be paid and warned of further action if compliance is not improved.
Source: Mobile Money Giant Faces L$25M Fine for Non-Compliance | Business | liberianobserver.com