Click cover to download

(Subscriber-only password access)

Not a subscriber?

Click here to join the FREE mailing list and receive password access

Though it is difficult to quantify the financial impact of money laundering, the International Monetary Fund has estimated it could amount to 5 percent of global gross domestic product. Undoubtedly, it poses a significant economic and societal threat. To that end, efforts in the fight against money laundering, terrorist financing and other forms of malfeasance are crucial. 2025 will be a pivotal year.

UNITED STATES

BDO

“Recent US anti-money laundering (AML) trends emphasise increased regulatory scrutiny, technological adoption and international collaboration to combat sanctions evasion, especially with the rise of digital assets. Key regulatory developments like the Corporate Transparency Act are intended to enhance regulatory frameworks and transparency. These regulations have widespread implications in the financial industry; consequently, financial institutions are adopting new technologies and artificial intelligence (AI) and machine learning (ML) to detect suspicious activities.”

MEXICO

BDO

“In 2024, the Mexican government noted the evolving sanctions landscape and heightened challenges for businesses and financial institutions (FIs). The risk of sanctions evasion, particularly by Mexico’s sophisticated drug trafficking organisations, has increased. These groups exert significant territorial control and influence state institutions through bribery and intimidation. The government outlines key evasion methodologies and offers guidance on mitigating these risks. US legislation has expanded the scope for sanctioning individuals involved in corruption in Mexico, but few designations have been made under the Global Magnitsky Act.”

UNITED KINGDOM

BDO

“Recent UK trends show a heightened focus on preventing sanctions evasion with stricter penalties. Amendments to the Sanctions and Anti-Money Laundering Act 2018 aim to tighten regulations and increase scrutiny, preventing individuals and organisations from bypassing sanctions. Enhanced monitoring and international collaboration are key measures to uphold the integrity of the UK’s financial system and support global sanctions enforcement. Significant overlaps between sanctions and digital assets in relation to anti-money laundering (AML) are emerging.”

REPUBLIC OF IRELAND

BDO

“Ireland has become increasingly focused on sanctions evasions in recent years. As a member of the European Union (EU), EU Council regulations in respect of sanctions are binding on Ireland once they are published in the EU Official Journal. The Markets in Crypto-Assets Regulation (MiCAR) became applicable to issuers of asset-referenced tokens and e-money tokens on 30 June 2024 and applicable to cryptoasset service providers on 30 December 2024 in Ireland. MiCAR aims to create a comprehensive regulatory framework for digital assets, ensuring that cryptoasset service providers comply with anti-money laundering (AML) and counter terrorism financing (CTF) regulations.”

GERMANY

Alvarez and Marsal

“Financial crime is a significant issue in Germany, which ranks among the top hotspots for money laundering among Organisation for Economic Co-operation and Development nations. According to data from the Federal Criminal Police Office, organised crime groups have caused billions of euros in damage annually, hitting a 10-year peak in 2023. Alongside a spike in cyber crime, sophisticated cross-border money laundering schemes and financial fraud related to FinTech innovations are also on the rise. Furthermore, the rapidly growing adoption of mobile payments in Germany introduces new risks.”

JAPAN

PwC Japan Group

“Financial crime is on a continuous upward trajectory, both in terms of frequency and complexity. Throughout 2024, there was a marked increase in crimes such as fraud and organised robberies, facilitated by the recruitment of perpetrators through social media platforms. This surge has led to the exposure of criminal networks and organisations involved in opening corporate bank accounts for the purpose of money laundering.”

AUSTRALIA

Herbert Smith Freehills

“Financial crime continues to grow, both in frequency and complexity in Australia. While it is often difficult to quantify the scale of financial crime, the Australian Criminal Intelligence Commission has stated that serious and organised crime involving money laundering cost A$68.7bn in 2022-23, which is an increase of $8.7bn from 2020-21 data. In addition, in 2023-24, Australia’s anti-money laundering (AML) regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC), received 381,758 suspicious matter reports relating to financial transactions, which was a 20 percent increase from the 2022-23 period, which itself was an 8 percent increase from previous years.”

UNITED ARAB EMIRATES

BDO

“In today’s rapidly evolving financial landscape, the rise of real-time payment services and cryptocurrencies presents unique challenges for regulatory bodies and financial institutions (FIs). These innovations, while offering significant benefits, also introduce new risks that must be managed effectively to ensure the integrity of the financial system. Real-time payments require enhanced vigilance and robust transaction monitoring, while cryptocurrencies demand a multifaceted approach involving customer due diligence (CDD) and regulatory collaboration.”

SOUTH AFRICA

KPMG Services (Pty) Ltd

“In recent years, South Africa has seen a concerning rise in the scale and complexity of financial crimes being perpetrated, and it is showing no signs of slowing down. In its 2024 Annual Crime Statistics Report, the South African Banking Risk Information Centre reported an estimated loss of R3.3bn due to financial crime. Financial crime has evolved over the years, with criminal syndicates becoming increasingly creative in their methods to commit such crimes. In South Africa, there has been a steady increase in the scale of economic crime through criminal syndicates which seek to illegally extract valuable assets and then use money laundering tactics to layer the source of ill-gotten gains.”

CONTRIBUTORS

Alvarez and Marsal

BDO

Herbert Smith Freehills

KPMG Services (Pty) Ltd

PwC Japan Group