December 29, 2021

The rock band Queen would say, “Another one bites the dust”. 2021 is heading for the exit and we look forward to what the new year will bring. The i-KYC team takes this opportunity to salute our customers and thank friends and fellow business integrity comrades-in-arms for their continuing efforts in fighting financial crime.

While various Covid variants had significant impact on the global economy and our daily lives and kept us very busy in the past year, we should not ignore that financial crime is still thriving. The human misery caused by illegal drug trade, human trafficking, illegal wild-life trafficking, bribery & corruption and tax crime, to name a few predicate offenses to money laundering is visible for anyone willing to see. We owe it to ourselves to prevent the responsible criminals from enjoying the benefits of their illegal activity.

There have been interesting developments in the past year. The release of the Pandora papers is one that I will highlight. This excellent investigative research led by Tax Justice Network has created new impetus to addressing abuse of offshore financial centres by certain multinational corporations, high net-worth/low morality individuals and criminal organisations. ‘Offshore’ finance is a Western invention dating from the ‘60s and ‘70’s of the previous century that has outlived its usefulness, if it ever had one! According to Tax Justice Network, countries are collectively losing $483 billion in tax a year. This unjustifiable tax revenue leakage affects many rich economies, undermining solidarity and fair play. But more seriously, low income countries are hit hardest by as they are withheld the means to develop their economies and assure adequate health care and education for their peoples. A small club of rich Western countries such as the UK, Netherlands, Ireland, Luxemburg, Switzerland and others cynically facilitate and sustain this anomaly. Check out this interesting fact-paper from TJN about how The Netherlands plays its dubious role. It is high time to close this chapter. Let’s make 2022 the year we turn the corner. And, this time in earnest, please!

Regulators have not been sitting idle in the past year. According to Kroll’s annual Global Enforcement Review 2021, as of June of this year, almost $1 billion in AML fines were imposed on regulated institutions. Expect this trend to continue into 2022 as more regulatory obligations are imposed on fintech companies, such as payment services providers and crypto platforms. Don’t be surprised to hear indignant cries of “foul!” from these entrants as they face increasing burdens enhancing their financial crime prevention infrastructure. A tip from someone who’s been there, done that: accept the inevitable and concentrate on building a culture of business integrity compliance, starting at the top. It might just be the smartest investment in regulatory compliance you make. Of course, your i-KYC partners stand by to help you transition to the new reality.

As the saying goes, making predictions is hard, especially when it is about the future. 2022 will no doubt deliver surprises. My advice: best to be nimble and agile; quick on your feet. Good luck to all in fighting the good fight!

Pieter van den Akker