A  policy template to help the regulated sector manage PF compliance

Proliferation Financing (PF) is an international crime which facilitates the movement and development of illegal goods in order to provide weapons of mass destruction for rogue states like Iran, North Korea and Russia. It has become an increasing cause of global concern over the last decade, and its potential consequences can be severe – from global instability to a catastrophic loss of life. 

Regulations and tools designed to disrupt PF means that the regulated sector needs to be aware of the dangers of PF and adopt appropriate policies and procedures to identify and manage the risks.

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What is proliferation financing?

Proliferation financing is of significant concern to every business in the regulated sector. A series of amendments to the UK Money Laundering Regulations 2017 came into force 1 September 2022. The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022 include an obligation for regulated entities to identify, assess and mitigate the risk of proliferation financing (PF). We have further detailed guidance on these amendments here.

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How to comply with Lei Geral de Proteção de Dados, Brazil’s data protection law

Brazil’s Lei Geral de Proteção de Dados (LGPD) is the country’s first comprehensive personal data protection law. It entered into force in September 2020 and and aligns closely with the EU’s sweeping data privacy act, the General Data Protection Regulation (GDPR).

Before LGPD, data privacy regulations in Brazil consisted of various provisions spread across Brazilian legislation. The aim of the LGPD was to unify the 40 different Brazilian laws that regulated the processing of personal data.

LGPD sets forth Brazil’s conception of personal data and when its use is authorised. Comprising 65 articles, it deals with the rights of data subjects and has 10 legal bases for the processing of personal data, which is four more than GDPR.

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All firms in the regulated sector must undertake a proliferation financing risk assessment, either a stand alone risk assessment, or as part of their existing money laundering and terrorist financing risk assessments.

However proliferation financing compliance must go beyond a risk assessment. The risk assessment process will result in a series of mitigation measures. This should include dedicated training modules on proliferation financing and guidance on high risk jurisdictions on PF.

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Neurodiversity is the term that describes the idea that there is naturally occurring variation in the human brain, which can impact a series of brain functions such as how we interact with one another and how we process information.

The word neurodiversity is short for neurological diversity. Neurological or neurology is a word that describes the biological functioning of the nervous system, and in particular the brain. Neuro- is a prefix that can be applied to other words to discuss things relating to the nervous system or brain.

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Straight talk on aligning regulatory priorities from panellists at the Law Society’s Risk and Compliance Annual Conference 

Many law firms’ regulatory priorities are determined by outside forces, such as regulators or guidance. But, as Richard Farquhar, financial crime and risk manager for Ashurst, noted, firms can’t just focus on that. They need to look at wider obligations and determine what the risks are.

Farquhar moderated a panel at the Law Society’s Risk and Compliance Annual Conference 2024 that focused on how law firms can manage their compliance in the current regulatory environment.

Andy Donovan, managing director and founder of VinciWorks’ Compliance Office, said that firms need a more bespoke approach. Customised compliance is more effective, he noted. Get specific, he counselled, and make sure you have audits in place. if you’re not checking it, it’s not happening, he added.

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At its Risk and Compliance Annual Conference, Law Society president expresses concerns 

The Law Society’s Risk and Compliance Annual Conference 2024, started off with a bang. Nick Emmerson, president of The Law Society, noted that, along with increasing compliance obligations on law firms were increasing fining powers by the Solicitors Regulation Authority (SRA). Emmerson was clear on where he stood on that. He called on the UK government to put a stop to those increasing powers.  

As Emmerson noted, current SRA fining powers are now unlimited for economic fine offences. Other offences are capped at £25,000. While the SRA wants to extend this to all offences, the Law Society does not believe they have a credible case for this. 

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Yes, it’s more important than ever. Here’s how to get started

No one really knows how to deal with AI yet. But as the use of AI technologies works its way deeper into our business practices and as AI slowly enters the legislative arena, we’re looking at, AI Act, it’s critical to have a policy ready. It’s vital for your business practice, for your employees, for your customers and to be prepared for eventual ongoing compliance. 

Ensuring that as AI advances, its use is ethical, controlled and helpful is what is propelling laws, discussions, and frameworks. It will go beyond data privacy, intellectual property and consumer rights into national and international regulations, crossing borders but necessitating understanding and adherence and a culture of responsibility. That is why a company AI policy needs to be able to function as a dynamic document that is prepared to change as the legal and cultural environment around AI evolves. 

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Understanding anti-money laundering for Australian regulated entities

Australia has been an outlier in AML for some time. Many accountants, lawyers and real estate agents who would be captured by AML requirements in Europe or the UK have been exempted from these requirements which are commonplace in other parts of the world. New Zealand has been updating its AML requirements on regulated entities for a number of years with no sign of backtracking. While Australia will hope to avoid some of the implementation mistakes made across the Tasman Sea, it does seem that this time, increased AML regulation in Australia is coming. 

Fortunately, Australian firms are in a strong position to learn from what regulated entities in the UK and Europe have been doing since at least the Fourth Directive was ratified by the EU in 2015. With years of experience in supporting the regulated sector to understand and comply with seemingly complex money laundering regulations, VinciWorks is here to demystify the changes and reassure the Australian regulated sector that things are going to be okay.

What will the most difficult changes be for Australian firms to grasp?

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