Digital vs. Cash, are we getting it all wrong?

This article was conceived after discussing with colleagues in the industry why the payments world has been driven into the Cash vs. Digital dichotomy. My research on cash has been inspired by analyzing the penalization of cash-based industries, such as the money transfer industry by the banking sector, which has resulted in the derisking phenomenon…

The Antimonopoly Prosecutor in Chile sides with MSBs on Bank Account Closures

We thank our colleague Carlos Grossman, for the report out of Chile where the Antimonopoly Division of the National Economic Prosecutor Office (División Antimonopolios de la Fiscalía Nacional Económica – FNE)  reports the investigation that took place after an August 2015 complaint by a Forex Firm denouncing seven banks of denying the opening of a…

Blockchain-based solutions to the Caribbean derisking problem

De-risking was an acute illness for the Caribbean financial sector in 2015 and 2016. In 2017, the height of the fever has broken, but the patient is still sick. Though correspondent banks in developed countries are no longer dropping services to Caribbean banks at a rapid pace, the region’s economies remain encumbered with a residue…

Las amenazas de Trump – Remesas, impuestos, migración, deportaciones y la construcción del muro

Remesas, impuestos, migración, deportaciones y la construcción del muro

Durante las primarias presidenciales republicanas del año pasado, Donald Trump expuso su propuesta de cómo forzar a México a pagar por el muro de 1,000 millas en la frontera entre Estados Unidos y este país. Los periodistas Bob Woodward y Robert Costa del Washington Post publicaron en Abril 5 de 2016 la noticia (http://wapo.st/2jbWHFn) en la cual Trump manifestaba su intención de amenazar a México con “cortar el suministro de remesas”. Trump envió en esta ocasión un memorando de dos páginas…

Michael McDonald, in memoriam

Michael was a 27-year veteran of the Internal Revenue Service, Criminal Investigation Division. He retired in 1998 and formed a Miami based consulting firm specializing in international money laundering, Bank Secrecy Act, Patriot Act, asset forfeiture, compliance and related matters. The firm has been a network of retired Special Agents, each with in-depth experience in money laundering investigations.

The US CSBS & the MTRA Report on the State of MSBs Regulation & Supervision

The Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA) released an important report on the state of the industry that is a must read for anyone in the industry and a report that all US Money Transmitters should be sending to their banks. The report is entitled “The state of state money services businesses regulation & supervision” and it examines the non-bank financial sector in the US and the bank discontinuance and de-risking challenges the industry faces. But the main objective is to let the banks know of the strict regulations and close supervision the state regulators have on all licensed MSBs.

MONEY TRANSFER COMPANIES WIN A MATCH AGAINST BANKS IN BRUSSELS

The Spanish Courts petitioned the European Tribunal for a guidance to clarify Bank Account Closure Cases and the presumption of remittances being high risk

Our IMTC speaker and colleague Antonio Selas from the firm Cremades & Calvo Sotelo in Madrid has been preventing Banks from closing bank accounts of MTOs in Spain by taking to court the banks and convincing judges that Banks are discriminating against their competitors and that their «remittances are high risk» argument has no factual evidence. We met Antonio Selas in IMTC EMEA 2015 in Istanbul and he came to Miami and made a presentation in IMTC WORLD 2015 entitled «Bank Account Closures Are Against the Law«.

FATF-GAFI GUIDANCE – A Risk-Based Approach for Money or Value Transfer Services

The timing could not have been better. FATF just published – February 2016, a report that all Compliance Officers of this industry must read, entitled Guidance for a Risk-Based Approach for Money or Value Transfer Services (SummaryFull Report (69 pages). I want to highlight three statements in the presentation of the report:

  • The risk-based approach, the cornerstone of the FATF Standards, requires that measures to combat ML/TF are commensurate with the risks. Such measures should not necessarily result into the categorization of all MVTS providers as inherently high-risk.
  • The overall risks and threats are influenced by the extent and quality of regulatory and supervisory framework, as well as the implementation of risk-based controls and mitigating measures by each MVTS provider.
  • While this Guidance is applicable to the entire MTVS sector (both banking and non-banking institutions offering MVTS); it is primarily intended for non-banking MVTS providers.

GAO Reports on International Remittances

I think it is very important that every person in this industry reads the GAO Report published on February 16th, 2016, entitled INTERNATIONAL REMITTANCES: Actions Needed to Address Unreliable Official U.S. Estimate – Highlights Page (1 page), Full Report (62 pages). A second report published the same day is entitled INTERNATIONAL REMITTANCES: Money Laundering Risks and Views on Enhanced Customer Verification and Record keeping RequirementsHighlights Page (1 page), Full Report (59 pages), Accessible Version (62 pages).

The House Financial Services Committee Letters

Just two weeks after the end of our IMTC USA 2015 Conference in Las Vegas, where we had a great panel on Bank Discontinuance entitled «Financial Access for the Money Transfer Industry – One step forward, two steps back? brilliantly moderated by Connie Fenchel with panelists Deborah Thoren-Peden from Pillsbury Law and Thomas Fleming from TF & Associates, the Republican leaders on the US House Financial Services Committee sent letters to the federal financial regulatory agencies asking to publicly disavow their “past, present, and future involvement in Operation Choke Point or any similar operation”. You can read the OCC letter here: http://bit.ly/1aP00Nu.

DEVELOPING PARTNERSHIPS WITH US LICENSED MONEY TRANSMITTERS

DEVELOPING PARTNERSHIPS WITH US LICENSED MONEY TRANSMITTERS

Inspired by Judie Rinearson’s article Surprise: State Licensing Laws Could Help Payments Innovation – http://bit.ly/1yd0FLW

We all know that technology and the creativity surrounding the tech revolution is inspiring a vast number of payment innovations. Online financial services, mobile payments, eWallets, bitcoin & the virtual currencies explosion, smarter ATMs, tools such as contactless chips, beacons, geo-location, are seeking to make payments more inclusive, easier to use, to track and to market, safer, faster, more efficient, more tailored to every user, etc.

FINCEN Director’s Remarks 8/12/2014

FINCEN Director’s Remarks at AML Conference on August 12, 2014

Remarks of Jennifer Shasky Calvery, Director of the Financial Crimes Enforcement Network (FINCEN) at the 2014 Mid-Atlantic AML Conference in Washington, DC on August 12, 2014

I have extracted a large section of FINCEN’s Director remarks a week ago at this compliance conference, because I feel it is important that everyone in the industry reads the message that FINCEN is sending to Banks with respect to banking MSBs, in our case Money Transfer Companies. If you still have a Banking Account is important that you share this message with their Compliance Team (a formal letter with the attached pdf highlighting some parts of the remarks) and even set-up a meeting to talk about the issue and ask what else you can do, as a company, for the bank to feel confident of your ever improving compliance practices.
Hugo Cuevas-Mohr

Cross Border Currency Exchange: The US-Mexico Border

The Background
A key feature of the international financial system over at least the last decades has been the large expansion of cross-border financial transactions. This expansion is very noticeable in border regions since people and businesses at both sides of the border try to benefit from advantages on one side or the other. Cross-border transactions have grown significantly and US northern and southern borders are no exception. .

The Fear
All types of Criminals – and terrorists too, around the world are also very active in the border regions; they use cash couriers as a major means of physically moving funds across borders in order to finance their illicit activities and to launder their ill-gotten gains. There have been many initiatives to facilitate the detection, investigation and prosecution of drug trafficking offences and serious crimes that involve the transportation of cash across borders; international anti-money laundering and counter-financing of terrorism standards recommended by the Financial Action Task Force (FATF) are in place in most countries and this Best Practice Paper describe such standards. Another good Best Practice Paper was issue by the MENA FATF group.

The Compliance Profession after the US 5 Million Thomas Haider proposed fine

The Background

According to news reports, FINCEN notified Thomas Haider, former Chief Compliance Officer of MoneyGram that he could be fined up to $5 million for compliance failures that resulted in the money-laundering fraud scheme where in November 2012 MoneyGram agreed to forfeit $100 million and entered into a deferred prosecution agreement with the Justice Department for aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act. .Tom Haider, who was the CO at the time, and his legal counsel are expected to meet with FinCEN officials to contest the fine, the news have also reported. Note: FinCEN announced on Dec 18,2014 that it had assessed a Civil Penalty of US 1 million and was seeking to bar him from the Financial Industry, see here: http://1.usa.gov/1xahywP .

According to court documents, MoneyGram processed thousands of transactions for its own agents known to be involved in an international scheme that defrauded tens of thousands of members of the U.S. public out of at least $100 million. MoneyGram profited from the scheme by collecting fees and other revenues on the fraudulent transactions from 2004 to 2009. More on this story here.. This proposed fine – and others – have caused a shift in prosecution of AML/BSA cases that is important to analyze.