ICIJ Annual Report, OCCRP, FATF, Basel, and New Zealand

This week, John and Elliot discuss the 2024 Annual Report from ICIJ, OCCRP’s reporting on the UK’s enhanced enforcement activities, FATF’s Second Public Consultation on Recommendation 16, the Basel Institute on Governance’s Project Falcon, the New Zealand national risk assessment, and other items impacting the financial crime prevention community.

ICIJ Annual Report, OCCRP, FATF, Basel, and New Zealand - Transcript

Elliot Berman: Hi John, how are you this week?

John Byrne: Good, Elliot. We're getting ready for the fourth annual AML Partnership Forum by the time you listen to this will be ending the program midday on Friday. So next week, we'll give you some insights from this week, which is we've said before, is designed for information sharing between the private and public sector.

Sadly, Some of our partners are not able to participate this year because of change in leadership. So we're hoping that will be adjusted in the future because we know that the rank and file very much support what we do here.

Elliot Berman: Yes, as everyone knows, the focus is public private partnership to assist making law enforcement more effective and our private sector compliance programs more effective.

I know since we spoke last, you were in New York at Madison Square Garden. You saw a good game by our Golden Eagles and then you saw half a good game by our Golden Eagles.

John Byrne: Yeah, we got by Xavier with a great comeback. We were ahead of St. John's at halftime and then got boat raced in the second half, so not even close. But we're in the tournament and one little nugget I think would be interesting to people that follow Marquette. The phrase the big dance that gets used this time of year came from Al McGuire, which is really a cool thing for those of us from Milwaukee or have gone to Marquette.

Anyway, there's a bunch of things we want to cover both international as well as domestic. The ICIJ, a group that we've worked with and talked to before the International Consortium of Investigative Journalists issued their annual report for 2024. Urge folks to go on their website and take a look at it.

A couple of things from Gerard Ryle, who's their executive director in his opening letter to the readers of the report, focuses on corruption. He says corruption rarely follows a straight path. It twists through layers of complexity, crosses borders, and flows through increasingly sophisticated networks that enable those in power to siphon resources, manipulate systems, conceal their identities as true beneficiaries and evade scrutiny. And that's one of the things that ICIJ does a really good job is exposing those hidden systems of power. So I urge folks to take a look at that and even consider supporting ICIJ. It's an organization that we need now more than ever.

Elliot Berman: A hundred percent agree. They're the continuing good sources you mentioned of disclosure of things going on, but also I think it's helpful for folks in, in our space to be paying attention because the disclosure that they do helps people see how these activities occur, and while they don't list them out as red flags, they can create essentially a red flags list, which can be very useful. What else do you have, John?

John Byrne: Sticking with corruption related topics the Basel Institute on Governance, another group that we focus on quite a bit, issued what they call their report on Project Falcon. The subtitle is Innovating the Fight Against Corruption Across the EU and Falcon they're partners with that organization.

It stands for the fight against large scale corruption and organized crime networks. And the piece on the website talks about what it is, why it's an important research project. And they make clear some of the things that they're focused on regarding innovation. So they're putting together evidence based indicators of corruption, automate risk assessments by fusing structured and unstructured data, and creating AI powered tools that reveal hidden corruption patterns.

And this is a good description of that project and more information is available on the Basel Institute on Governance website.

Elliot Berman: One of the interesting things about the release is they talk about coming at this challenge from an interdisciplinary approach pulling in expertise in the social sciences and research, technology development, and law enforcement.

And I think that's a good message for all of us in the space to think about when we're working on tough problems are there people who don't do what we do, but can bring insights.

John Byrne: I agree. I saw too staying with international topics, that FATF has made clear that their Second Public Consultation on Recommendation 16, which deals with payment transparency, the comments are due April 18th.

So what do you see in the focal points of that?

Elliot Berman: This builds on work that came out of the February 2024 plenary and Recommendation 16 in various iterations has been around for a long time. Payment transparency is a big issue and we talked about this briefly coming out of the the February 2025 plenary.

A public consultation is what we would call the comment period, if you're here in the U.S. But they're looking for ways to ensure transparency that is technology neutral so it's not about fixing a particular platform. The goal is to follow the principle of same activity, same risk, same rules, irrespective of the platform.

And they want to hear from all the interested stakeholders. So whether you're a bank or in the payment processing space itself, or a recipient or transmitter of a large number of payments. If you're in the international space, or in the U.S., because this will influence U.S. activity, it's important for you to take a look at the explanatory memorandum.

And then send any comments that you would in the same way that you would do a comment letter about a U.S. regulatory proposal.

John Byrne: We talked about ICIJ, another organization that does great work is the OCCRP, the Organized Crime and Corruption Reporting Project, and this week they have a story in there about the U.K. beginning to enforce their laws against online scams and child sex abuse. This is their online safety act and the legislation from the story says it targets a variety of online crimes, including human trafficking and child sexual abuse. The act covers more than 100,000 platforms, which does include Facebook, X and Google which were given time to assess the issue before enforcement began.

One of the regulator's enforcement director said in the statement, any provider who fails to introduce the necessary protections can expect to face the full force of their enforcement action. And this particular measure they're hoping will reduce fraud, because the platforms will be required to quickly remove illegal material. However, the act can't necessarily prevent fraudsters from getting to victims in the first place. So that's always, that's an outreach and communication issue. They also mentioned in the story that France has a similar law that passed in March. And that law in France is modeled after German legislation. So a lot going on in Europe regarding online scams.

Elliot Berman: And somewhat in parallel to that Europol issued it's 2025 edition of its EU Serious and Organized Crime Threat Assessment, so that's S O C T A. And some of the same issues that you just talked about were highlighted. AI fraud is among the top Europol threats.

There's online fraud, cyber attacks, online sexual exploitation, migrant smuggling, drug trafficking, firearms trafficking, and waste crime. And they made a strong comment in the report about the fact that criminal operations are increasingly relying on digital tools. Element of every criminal process are increasingly moving online from recruitment and communications to payment systems and AI driven automation. In addition to the UK and the individual member states of the EU laws, it's valuable to take a look at this report and get an overarching view. This report gets published every four years, and so a lot has happened since the 2021 report.

John Byrne: We've also talked quite a bit about, in the states, what's happening to various agencies. IRS, FBI, banking agencies. We've referenced the clear attacks on CFPB, the Consumer Financial Protection Bureau. I just wanted to highlight in this I think it's this week's New Yorker, there's an article, a lengthy article about part of what the CFPB does regarding protecting veterans.

And they have a series of interviews. With folks about it, an element of CFPB that works specifically to help veterans prevent scams against veterans, that sort of thing. And that that area will no longer exist. It's called Killing the Military's Consumer Watchdog written by Tammy Kim, and it's in the March 18th edition of the New Yorker. Something worth taking a look at because fraud and scams are part of what we care about in our community.

Elliot Berman: New Zealand published its national risk assessment. And just a few highlights in the threats area they talked about the basic approach of looking at a matrix of inherent risk versus controls to arrive at a net threat position. And they commented that a lot of organizations in New Zealand don't do this important exercise.

I would say it's more standard here in some other countries. But they talked a lot about cyber enabled scams and scams against the government. That cyber enabled piece we're hearing as a pretty consistent comment across the across the global landscape.

They also talked about some vulnerabilities. They said that banks and money transmitters related to remittances and VASPs are all rated high risk for vulnerabilities for money laundering in their assessment. A worthwhile report to take a look at even if you're not doing work in New Zealand. I think these national risk assessments are valuable because we can see where there are commonalities, where there might be geographic pockets that are different. As you're doing your own risk assessment, if you have a global footprint looking to those geographies where you do business to see what their risk assessments are can certainly influence your thinking.

John Byrne: I just add to that one of the commenters about the New Zealand risk assessment identified one of the vulnerabilities, besides the ones you mentioned, was a lack of information sharing in the banking sector. And that was considered a key vulnerability, and that's an important area for all of us. We continually talk about information sharing, so it's interesting to note that New Zealand, in their risk assessment, said that's also an area that needs improvement. So that's something that we see in many jurisdictions, but I wanted to to mention that was also identified.

Elliot Berman: John what else do you have?

John Byrne: We got some interviews coming up. I did an interview the other day with Allison Jimenez from Dynamic Analytics. She does expert witness work. She's versed in a whole series of things and very active on LinkedIn, by the way. You should follow Alison on LinkedIn. She does a lot of really good commenting on issues.

And her brother, Steve Kermeling, who is the founder and CEO of CRB Monitor, the cannabis related business. organization that Steve set up back in 2014. So I talked to both of them about those various issues. One of the things that Allison identified as a major problem is sextortion and it's a heartbreaking area of fraud.

Just when we do publish or post the interview to take a look at that we're going to try to do more in depth analysis of that area, but it was great talking to both of them that they know so much and that's coming up and I know we have a March webinar. What's going on with that one?

Elliot Berman: That's the 27th and it'll live stream at one o'clock. You can still register at our website and that is about cryptocurrency.

John Byrne: Our advisory board member Don Fort will be moderating that discussion.

Elliot Berman: And we'll talk to you next week. We'll give you, as John said, a little bit of of the readout from from the Forum and talk about what else is new. John let's have a great time at the Forum.

John Byrne: Yep. Hang in there, everybody. We'll talk to you next week.

Elliot Berman: Okay, John. Bye bye.