How Anti-Financial Crime Teams in FI`s Evolved

A major catalyst for the creation of dedicated sanctions roles was the first US sanctions legislation, notably the Trading with the Enemy Act (1917) 1and the establishment of the Office of Foreign Assets Control (OFAC) 2in the 1950s. Together, they gave the US government broad powers to administer and enforce economic sanctions motivated by foreign policy. Over time, these measures required individuals or even small teams mainly in the banks to keep track of the ever-changing sanctions lists and ensure that no prohibited parties had access to the financial system. 

EU AML Framework 2025

The European Union will implement a transformative AML framework in July 2025, taking a significant step in the fight against money laundering and terrorist financing. This new package, already adopted in 2024 in response to persistent vulnerabilities in the financial system and the complexity of cross-border risks, offers an ambitious overhaul of the regulatory landscape.

Risk-Based Approach Adoption

The Risk-Based Approach (RBA) is a foundational principle in modern anti-money laundering (AML) frameworks. It is about understanding the risks of money laundering and terrorist financing (ML/TF) within a business. By identifying and assessing these risks, the RBA supports an effective but also efficient allocation of resources to combat ML/TF effectively.

Suspicious Activities Detection acc. to the German Money Laundering Act (GwG)

Identifying suspicious activities is a cornerstone of combating money laundering, helping Obliged Entities (OEs) detect and deter fraud and other illicit activities. To this end, OEs must closely monitor high-risk criteria to flag transactions or behaviours that deviate from standard patterns. All red flags should be investigated to determine whether they represent legitimate transactions or warrant further scrutiny.

Challenges in AML Compliance

The threat of money laundering has become a major problem for financial institutions worldwide. Both banks and non-bank financial institutions, such as insurance or investment companies, are under increasing regulatory pressure to implement effective and efficient anti-money laundering (AML) solutions to prevent illicit financial activities. These institutions must not only protect their business and reputation, but also ensure that they do not become unwitting accomplices of criminal individuals or organisations.

Implementing Effective AML Solutions

The threat of money laundering has become a major problem for financial institutions worldwide. Both banks and non-bank financial institutions, such as insurance or investment companies, are under increasing regulatory pressure to implement effective and efficient anti-money laundering (AML) solutions to prevent illicit financial activities. These institutions must not only protect their business and reputation, but also ensure that they do not become unwitting accomplices of criminal individuals or organisations.

Overcompliance in Sanctions Compliance

Confused man in suit looking at two similar doors

The proliferation of unilateral and secondary sanctions has led to a concerning trend of overcompliance by businesses, particularly banks and financial institutions. Overcompliance refers to excessively restrictive practices that go beyond the requirements of sanctions regulations.

Money laundering through shell companies

A shell company is a registered legal entity that exists only on paper and has no significant assets or business activities. The shell company pretends to provide real business services in order to conceal illegal funds and its beneficial owner, launder money or avoid tax payments.

UAE, grey-listed – fair or unfair play

In recent years, the United Arab Emirates has found itself at the forefront of international scrutiny following being grey listed by Financial Action Task Force (FATF). The UAE is known as a trade hub in the Gulf region and the country has appeared to be determined to uphold its reputation as a business center. In the following paragraphs, we aimed to explore the UAE´s grey listing case from various perspectives.

Ransomware Financing

According to FATF Report in March 2023, ransomware incidents have grown significantly in recent years, both in number and scale. Additionally, the landscape of ransomware attacks has evolved, and attackers have adopted new techniques to increase the profitability of their endeavours and enhance the likelihood of successful attacks. These have led to a global concern on how to prevent and combat the threat.