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European Commission Issues AMLD5 Non-Implementation Warnings

The European Commission (EC) announced that they have sent letters of warning to Cyprus, Hungary, Netherlands, Portugal, Romania, Spain, Slovakia, and Slovenia for not properly implementing Fifth (5th) EU Anti Money Laundering Directives (AMLD5) regulations by January 10, 2020. These countries have two (2) months to make the necessary adjustments. Should they not comply by the deadline, the EU Court of Justice will assess daily fines until they are deemed compliant.

EBA Setting Public Consultation and Guidelines for AML

The European Banking Authority (EBA) has issued public consultation notices on AML with new guidelines and consultations through May 2020. This is to fulfill the EBA’s goal to be more involved in developing regulatory guidelines in technical standards for member organizations. Such guidelines will focus on a firm’s internal client due diligence (CDD) system and controls.

IDnow is keenly interested and involved in this process to make sure compliance and security are properly addressed. Through the German Banking Association (BDB) and IDnow’s public and regulatory affairs efforts, IDnow was chosen to be a part of a select group to participate in EBA’s public hearing process comprising high-profile and relevant organizations across the EU. Hearings are scheduled for May.

UAE: DIFC and Mashreq Bank have officially launched the region’s first blockchain data sharing platform for digital KYC (eKYC)

Mashreq Bank, the UAE’s oldest privately-owned bank, alongside Dubai International Financial Centre (DIFC) expanded their blockchain data-sharing exchange to allow licensed businesses and corporations to open bank accounts instantly across the UAE. Fitting in line with Mashreq Bank’s desire to cater to customer comfort in combination with the nation’s remarkably high technology penetration rate, this project is a glimpse into future ways of banking.

From a technology and regulatory perspective, DIFC’s regulatory sandbox and incubator proved to be a success. Norbloc, the company who built the framework, was a part of the DIFC’s incubator. Their platform Fides is powered the test system in place since July, and will power the nationwide program. This is a victory for forward-thinking regulation and prudent oversight.

Automated Biometric Identification and Registration Available for Smart ID in Baltic Countries

Estonia’s SK ID Solutions, a provider of the Smart ID services in the Baltic region, has created a new Biometric identification and registration method for Smart ID. The enables those without access to other electronic authentication tools to create a Smart ID account. Through this platform, users can secure an electronic identity with authentication.

The Baltic region’s widespread acceptance of eID applications continues its tradition of serving as a testbed for the public use of such applications. The new features here include, digital signatures which can upgrade to qualified electronic signature (QES). Additionally, SK ID Solutions has received approval from Estonian Information System Authority and a TUVIT internal audit.

In the coming months, Smart ID accounts will need to be updated. The infrastructure is being upgraded with assistance from UK-based IProov and Netherlands-based InnoValor who specializes in NFC capabilities on smartphones. Smart ID is available in all three Baltic states, and can be used for more than 200 e-services with transactions totaling more than 50 million each month.

Hong Kong to Bolster Crypto Regulations in Line with International AML Norms

In spite of Coronavirus concerns in the region, the Hong Kong securities regulator SFC announced that it aims to bolster its oversight and enforcement of cryptocurrency exchanges. This is an effort to better align with international standards in AML so the fragmented Asian crypto market can see less money laundering, but continue to gain a greater share of the global crypto M&A market.

The proposed regulations are likely to address virtual asset service providers (VASP) as well as Hong Kong-based brokers and exchanges. The Securities and Futures Commission (SFC) has placed a June deadline to devise this set of rules.

Current issue.

The KYC Insider - July/August 2020

Topics covered in this issue:

  • AML Compliance in the Gambling Sector Across the EU is Ramping Up
  • Estonia’s July 1 deadline to Implement AML amendments including KYC compliance Pertains to Crypto License Holders
  • FCA Updates Brexit Preparations by end of Transition Period
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