Increased Economic Pressure on Iran, New Opportunities for Syria, and the Fight Against Online Scams

In this week's episode of This Week in AML, John Byrne and Elliot Berman break down Treasury's renewed sanctions campaign against Iran and discuss what it could mean for global trade, enforcement efforts, and China's role in the sanctions landscape.

They also examine the U.S. decision to remove Syria from its State Sponsors of Terrorism list, a move that could pave the way for reintegration into the global financial system and future engagement with FATF standards.

Additional topics include Singapore's new Social Media Code of Practice aimed at reducing financial scams on major platforms, Europol's warning about increasingly violent museum heists, updates from OCCRP on corruption and money laundering investigations, and the FDIC's efforts to streamline the deposit insurance application process for new banks.

Plus, a look at recent anti-corruption research from the Basel Institute on Governance and upcoming AML-focused educational events.

Increased Economic Pressure on Iran, New Opportunities for Syria, and the Fight Against Online Scams - Transcript

Elliot Berman: Hey, Jon. How are you today?

John Byrne: I'm good, Elliot. Heading out for a couple days so I appreciate we're scheduling this a little bit early. Obviously, like all our recordings, things can happen before the Friday post. There were some major announcements yesterday, I know we'll get to in a minute, regarding sanctions against Iran.

But there are a potpourri of some smaller things that I thought we could talk about. One is our friends at the Basel Institute on Governance put out a new working paper. This particular one, it's all about anti-corruption strategies, how foresight and anticipatory governance can help practitioners respond.

So they say by mapping that system, you can anticipate how actors may respond to reforms, scanning for emerging trends, risks, and opportunities, and they can identify warning signs. There's a summary and a full paper. This is available on the Basel website. And again, it's corruption evolves and adapts fast. How can we stay ahead?

This group produces some really excellent resources with the research they do. But I thought I would just highlight that as one item to take a look at, especially if you're active in the anti-corruption space.

Elliot Berman: Yeah, good report and you've brought a whole bunch of the Basel things to our conversation, and they're always valuable and informative. So a good place for our audience members to keep an eye.

One thing. The US removed Syria from its list of state sponsors of terrorism. It's been on the list for 50 years. So this will be the beginning of an effort to open Syria to international trade, reconnect it to the global economy, reconnect it to the international structures related to financial crime prevention, like FATF, and for it to develop a strong anti-financial crime framework because that nowadays is table stakes to being a full participant in the global economy.

So be interesting to see. Lots of work to be done there, but an interesting decision by the US. And you mentioned a moment ago a big announcement coming out of Treasury.

John Byrne: Yeah, one more thing on Syria.

David Lewis, the former executive secretary of FATF, had his own posting on this and as you mentioned, after fifty years, the US has removed them. He does emphasize the importance of Syria eventually getting involved with FATF, and they'll have a first mutual evaluation in a couple of years.

So it sounds like he's active in consulting in that space. So if you don't already follow David Lewis, I think it's worth doing. But I just thought I would add that because in addition to us seeing the delisting, if you will, many others have focused on this as well. So sm-sm-small announcement, but a potential major impact. We'll see what happens.

As you said there was a, press conference yesterday from Bessent, the Treasury Secretary, which he said that the US is seeking, and I'm quoting, "Economic asphyxiation of this regime," unquote with a new campaign of sanctions that they are trying to sever the country's links to the global economy.

So this got a lot of play yesterday in the media, interviews on cable. And a lot of our friends and experts on LinkedIn weighed in on this as well. Dan Tannenbaum, who we've interviewed before from Oliver Wyman, I saw his interview on CNBC and he said the sanctions really never have been lifted, but they've been suspended.

And he said from his perspective yesterday's announcement is really nothing new unless there's a focus on China, 'cause he says China is the linchpin here. I know Bessent was asked about China and said that nobody is I'm paraphrasing "No, everything's on the table, so no country is not being considered here."

But obviously China is the big dog, as they say, and since Xi is coming to the US in a month, that's gonna be interesting to watch. But what other things did you take away from Bessent's announcement, Elliot?

Elliot Berman: Not a lot more than you did. OFAC announced a number of technical changes to put this in place, but as you pointed out many of the sanctions that are being deployed had been in place before and had been suspended and now being turned back on.

I also listened to Dan's interview on CNBC and caught the same point you did about China. He quoted an interesting statistic, which is that 80% of the oil sales that Iran has been able to make in avoiding sanctions has been to China. For a, a real severance of Iran from the global economy as you pointed out, China is the key player, and we'll see.

We'll have a better idea down the road. It's never clear to me how successful our government will be in negotiations with foreign countries, as we've noted with the back and forth with Canada, for instance. We'll just have to see.

John Byrne: Yeah, we are in a trade war with our neighbor to the north.

Elliot Berman: Our biggest trading partner, actually.

John Byrne: Yeah. Exactly. So just noodle on that for a bit. You also had mentioned pre-recording about an announcement in Singapore. What was that about?

Elliot Berman: Singapore has passed a a new provision called the Social Media Code of Practice. It'll become effective at the end of January of 2027, and it requires the three large social media platforms, so that's Facebook, Instagram, and TikTok to block, advertisements from unlicensed financial service firms including those not licensed by the Monetary Authority of Singapore. The whole focus here is to cut down on scams. It's been reported that in twenty twenty-five, thirty percent of the scam cases in Singapore came those three platforms.

There's a number of other things they have to do about checking to be sure that URLs aren't masked, and therefore, there's misdirections when a user clicks on it, and there are relatively high penalties. So I think this is interesting for two reasons. One is, for a while, Singapore was behind the international standard. They've become very forward-thinking about it,.

And social media is a hot topic around the globe. We've certainly heard proposals here in the US by some states, as well as some discussion in Congress about limiting social media access to young people and a variety of other things. But we know that from all of the statistics that social media platforms are really the the home base for many scams.

And recognizing that and having the platforms do something about it, this is might be if not a perfect model, certainly an indication of a way to do it.

John Byrne: Our friends at OCCRP have, had a couple of things that are relevant to our world that they've reported on.

One is President Zelensky of Ukraine has dismissed a senior aide that was suspected in the $3.3 million money laundering case. They say that several senior officials and lawmakers used a state-owned bank and shell companies to launder criminal proceeds intended as bail in a separate corruption case. So that, that information and that story is available on the website. Also I would mention that separately there was a report, and you identified this separate from the OCCRP report, and that's a Europol report. Do you want to talk about that?

Elliot Berman: Europol has issued a new report. One of their spotlight reports, and it's entitled Changing Tactics, Changing Targets: The Evolving Nature of Museum Heists.

And the focus here is that they're becoming much more violent. In the past many museum heists happened overnight, somehow defeating the security systems and the people who were on guard. And The museum curators came in the morning and famous pieces of art were missing from the walls.

And now it's much more about using sledgehammers and explosives and firearms. So much-- first, much more dangerous for the staffs of the museums, but equally it's expanding the scope of who can do a museum heist. You used to have to be a very talented art thief, and now you can be not so talented as an art thief, but just as someone who's willing to do a smash and grab.

They also talked in the report about targeting high-value items like pieces of jewelry with precious metals and gemstones, not for their value as an art piece, but for their breakup value. It's something to pay attention to and a good report to read.

John Byrne: And if you have time, there's an early '70s movie called The Hot Rock with Robert Redford, which is a delightful movie about the theft of a major piece of jewelry.

Elliot Berman: That's right. And you can watch you can watch the remake of The Thomas Crown Affair if you want to watch another museum heist movie.

John Byrne: There you go.

Elliot Berman: That's right.

John Byrne: The International Criminal Court, the ICC there's been several sanctions by the US against ICC officials. So the ICC late last week came out with an announcement calling those sanctions a flagrant attack against the independence of an impartial judicial institution, which operates pursuant to the mandate conferred by its state parties from across the region.

This is from their press release on this from August the 19th. You can read more about it and what the US has done to precipitate this I believe off the the Treasury website as well. Maybe State Department too. I'm not 100% sure where the s- where the sanctions announcements first came regarding ICC judges.

Elliot Berman: We've talked a fair amount about the OCC's making it easier to get an OCC charter, whether it's a full bank charter or one of their limited purpose charters.

The FDIC announced this week that they are revising the process for applying for Federal Deposit Insurance. So if you have a full bank charter in the United States, to offer insured deposits, you need FDIC insurance. If you're a credit union, you need credit union insurance from the NCUA. The FDIC process during a new bank chartering has been somewhat arduous.

They're changing the process, not a lot. The biggest thing is they're offering an opportunity at 90 days to get a preliminary approval, which will help organizations who are out doing their capital raise and things like that. We'll see. As long as they don't change the vetting process so that the right people are getting bank charters and are being put on boards of directors, I think this is a good thing.

A good business plan still is required. All of the things that used to be required are still there. This should be helpful, but again as long as they don't change the vetting process. I'm also concerned about their ability to meet more aggressive timelines with a reduced staff because, of course, we don't need as many regulators, so therefore there aren't as many people. So we'll see how that goes.

John Byrne: Yeah, Joe and I talked about the World Financial Liberty situation. Again vetting is important, but certainly conflicts with oversight are also something to watch out for. So we'll see how this all plays out.

Elliot Berman: Yes. So anything else?

John Byrne: No. I had an interview with an OCCRP reporter Zack Kopplin last week. He talked about a couple of defense contracting abuse cases and an issue called Golden Passports, which is relevant to us. We've actually done some programming on that. So that'll go up at some point. That was a fun conversation.

Again, the investigative journalists that we have globally are just so important to keep people's feet to the fire. So anytime we can have a sit-down with folks that are doing reporting in areas that our community cares about, we obviously want to take advantage of that.

Elliot Berman: Agreed. This month's webinar on risk related to virtual assets will have live streamed when you hear this podcast, but you can look by the end of next week to the recording to appear on our website, and that'll be very good. And i'm working on a compliance best practices webinar for September 24th. That'll live stream at 1:00 PM Eastern Time on that day. So by the time you hear this, you should be able to register for that at our website. And John I know you're going on a vacation, so I hope you have a good time.

John Byrne: Yeah. We'll be off the grid for a little bit, but things will still continue, so appreciate the fact that you and Joe will have this conversation next week.

Elliot Berman: Happy to do it, and thanks for doing that with Joe while I was gone on a vacation last week.

John Byrne: All right, man. Stay safe. We'll talk soon.

Elliot Berman: You too. Bye-bye