Grey List / Black List Update 2023

September 10, 2023
The Grey List and the Black List, created by the Financial Action Task Force (FATF), categorize countries based on their perceived risks and compliance with international standards in countering financial crimes. The FATF is an intergovernmental organization established to combat money laundering, terrorist financing, and other financial crimes globally. The Grey List  The Grey List, officially known as “Jurisdictions under Increased Monitoring,” consists of countries with strategic deficiencies in their frameworks to combat money laundering, terrorist financing, and proliferation financing. These countries are urged to take corrective measures. The Black List The Black List, referred to as “High-Risk Jurisdictions subject to a Call for Action,” includes countries considered severe criminal threats to financial systems. These countries may be involved in activities like weapons proliferation or have not met FATF’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) requirements. As a result, FATF member nations are recommended to implement stricter compliance measures, including enhanced due diligence for transactions involving countries on the Black List. According to the FATF, here are the countries that are currently blacklisted and greylisted (updated June 2023): Black List – High-Risk Jurisdictions Subject to a Call for Action: Democratic People’s Republic of Korea Iran Myanmar The Grey List – Jurisdictions under Increased Monitoring  Albania Barbados Burkina Faso Cameroon Cayman Islands Croatia Democratic Republic of Congo Gibraltar Haiti Jamaica Jordan Mali Mozambique Nigeria Panama Philippines Senegal South Africa South Sudan Syria Tanzania Turkey Uganda United Arab Emirates Vietnam Yemen For more information, visit 

AML in the US Market – Navigating the Path for Growth or Sinking Boat?

August 3, 2023
  Recent incidents of bank collapse, hefty fines, and sanctions against the crypto market have highlighted the gaps between the strictness of the regulatory environment in the US and common risk management standards. While the expectations are clear, banks and financial service providers are still struggling to effectively manage risks, particularly in Anti-Money Laundering (AML). Despite multiple fines and sanctions, some institutions have failed to improve their controls rapidly. One such example is Deutsche Bank, which recently faced a $186 million fine from the Federal Reserve for insufficient AML progress. This reflects the ongoing challenge faced by financial institutions in executing Financial Crime risk management controls efficiently. However, some institutions have found a solution in advanced AI technology which has enabled them to meet regulatory expectations with greater efficiency and responsiveness. The Role of Regulators Regulators play a critical role in shaping the AML landscape and ensuring compliance with stringent standards. However, there is a concerning distance between the efforts invested by financial institutions and the actual outcomes achieved. Institutions often prioritize appearing compliant over truly trusting their own controls. Albert Einstein’s famous quote, “Insanity is doing the same things and expecting different results,” rings true here.  Even regulators recognize the need for a less conservative approach, incorporating new technologies to improve AML practices. The mutual interest in maintaining a stable and efficient financial system binds all stakeholders, including regulators. Root Cause Analysis – How Did We Get Here? Twenty five years ago, banks were the primary players in the financial sector. The September 11 attacks and the subsequent “Patriot Act” exposed a critical problem – banks lacked a comprehensive understanding of AML compliance and their crucial role as “gatekeepers” defending society against bad actors. In response, standards were raised, and banks adopted stricter controls, with the US becoming a global leader in the fight against financial crimes. The pivotal moment came with the HSBC Deferred Prosecution Agreement in 2012, where regulators emphasized a zero-tolerance approach to failures in Financial Crime controls. Since then, compliance standards have only become more stringent, and banks have made several upgrades to their AML practices. However, despite these efforts, satisfactory outcomes remain elusive in many cases. In the next blog post, we will delve into how to move forward from this challenging situation. By acknowledging the current state of affairs and understanding the roles of regulators and financial institutions, we can pave the way for more effective and efficient AML practices that rebuild trust in the financial system. Stay tuned for our exploration of potential solutions and a path toward growth in the fight against financial crimes. Written by: Yaron Hazan, VP Regulatory Affairs at ThetaRay

Unraveling the Distinction: Fraud vs. Money Laundering

July 20, 2023
In the world of financial crimes, two terms stand out prominently – fraud and money laundering. Both illicit activities have far-reaching consequences on individuals, organizations, and even entire economies. Understanding the nuances between fraud and money laundering is crucial in combatting these threats effectively. In this blog, we will delve into the fundamental differences between these two financial crimes and explore the distinct approaches taken by their respective solutions – anti-fraud and anti-money laundering products. Defining Fraud Fraud is a deliberate act of deception or misrepresentation with the intent of obtaining financial gain or causing harm to others. Perpetrators of fraud often employ cunning tactics to swindle individuals, businesses, or governments. Examples of fraud include identity theft, credit card fraud, and investment scams. The primary focus of fraudsters is on securing immediate monetary benefits, and their schemes can be perpetrated through various channels, targeting unsuspecting victims. Defining Money Laundering On the other hand, money laundering involves the process of disguising the origins of illegally obtained funds, making them appear legitimate. Criminals involved in various illicit activities, such as drug trafficking, corruption, or terrorism, generate substantial sums of “dirty” money. Money laundering allows them to integrate these illicit funds into the legitimate financial system, thus avoiding detection and seizure. The objective of money laundering is to “clean” the money and render it usable without raising suspicions. Comparing Solutions Anti-Fraud Products Anti-fraud products are designed to detect, prevent, and mitigate fraudulent activities across various sectors. These solutions often leverage advanced technologies, data analytics, and machine learning algorithms to identify suspicious transactions, patterns, and behaviors. They work proactively to protect individuals and organizations from financial losses and reputational damage caused by fraudsters. These products often employ real-time monitoring and alerts to raise red flags when fraudulent activities are detected, enabling prompt action to be taken. Anti-Money Laundering Products Anti-money laundering (AML) products, on the other hand, have a different focus. They are specialized in detecting and thwarting money laundering attempts within the financial system. AML solutions sift through vast volumes of financial data, searching for unusual patterns and activities that may indicate money laundering. These products assist financial institutions in complying with stringent regulatory requirements, such as Know Your Customer (KYC) and Suspicious Activity Reporting (SAR), ensuring that potential money laundering risks are duly identified and reported. Many financial institutions are still using rules-based systems, which are often slow to scale and have a high number of false positives. Newer solutions leverage Artificial Intelligence (AI) that is semi-supervised or unsupervised that can detect potential money laundering at a high level of  Below, we’ve highlighted the key differences in this chart:  Conclusion Fraud and money laundering are two distinct but interconnected financial crimes that pose significant threats to individuals, businesses, and global economies. While fraud involves intentional deception for personal gain, money laundering deals with the integration of illicit funds into the legitimate financial system. Anti-fraud products focus on safeguarding against deceptive schemes, while anti-money laundering products con+ concentrate on detecting suspicious financial activities

Mark Gazit passes the baton to Peter Reynolds, who has been appointed as the next CEO of ThetaRay.

June 15, 2023
Peter Reynolds, a Fintech Industry Veteran, who served as Thetaray’s Chief Revenue Officer (CRO), alongside Mark Gazit, for the past two years, will now lead the company for continued strong international expansion. Hod HaSharon, June 15, 2023 – ThetaRay, is a category leader, providing AI-powered transaction monitoring solutions, servicing leading global banks, FinTechs, and regulators.  The company announced today the appointment of Peter Reynolds as its next CEO. Peter is succeeding Mark Gazit, who served as the company’s CEO and is now shifting to an advisory role. Mark, together with Peter, has jointly led ThetaRay’s successful go-to-market strategy during the last two years. During that period, the company grew 5X in ARR and added more than 50 customers across North America, Europe, APAC, Africa, LATAM, and ANZ. Peter brings with him over 20 years of experience in FinTech, leading GTM organizations for market leaders such as  Earnix, Fundtech, Reval, and Thomson Financial. Mark Gazit will continue to serve in ThetaRay, handling strategic business opportunities in an advisory capacity. “We thank Mark for the important role he has played in recent years and his contribution to establishing the company’s international operations,” said Erel Margalit, founder and executive Chairperson of JVP, and Chairman of ThetaRay. “With ThetaRay’s presence in America, Europe, Israel, APAC, and the Arab world, ThetaRay will continue its market leadership, powered by its AI-based solutions, for creating a safer world, enabling safe cross-border money transfers and payments in the financial services, banking and insurance industries worldwide. We congratulate Peter on his new role as the company’s CEO, and we are confident that he will accelerate the already strong results he has achieved with ThetaRay. Peter’s experience in creating value and financial growth in global companies, as well as his deep understanding of ThetaRay and the global financial market, will lead ThetaRay to continued significant growth in the coming years and position it as an international market leader.” Mark Gazit, the former CEO of ThetaRay, added: “I am proud to have managed the company, through early-growth stages, leading it to become a category leader, and am now passing on the reins, transitioning to an advisory capacity. The choice of Peter Reynolds, with whom I have been working for the past two years, will enable a seamless managerial transition and ensure continued growth. I thank the company’s board of directors and the chairman Dr. Erel Margalit, for the great partnership in leading the company to achievements.” Peter Reynolds, ThetaRay’s new CEO, stated: “I am grateful to the ThetaRay board of directors for their trust, and to Mark Gazit for his work and achievements with the company to-date. I am ready and excited to lead ThetaRay to its next stage of growth and expand the company’s clients, partners, and business opportunities worldwide.” ThetaRay’s solutions are used by banks and governments to prevent financial crimes, with the company’s flagship product designed to mitigate risks in payments ensuring their client’s platforms are not used in fraudulent activities, money laundering, and other financial crimes. The

Money Laundering Fines and Punishments by Country: A Global Overview

June 12, 2023
  With governments and regulatory bodies worldwide cracking down, financial institutions have a responsibility to ensure that transactions are safe and secure from money laundering, a pervasive financial crime with severe consequences for local and global economies. Understanding the potential damage money laundering can cause a business is key to determining your AML strategy and investment.  In this blog post, we provide a partial overview of the penalties and punishments for failure to comply with AML regulations: Europe: United Kingdom: Unlimited fines and a prison term of up to two years Germany: Fines up to €5 million or 10% of annual turnover (whichever is greater) France: Fines up to €5 million for individuals, and €100 million or 10% of annual turnover for legal entities Italy: Fines up to €5 million or double the value of the illicit transaction Spain: Fines up to €5 million or 10% of annual turnover (whichever is greater) Netherlands: Penalties include fines up to €5 million or 10% of annual turnover (whichever is greater) Switzerland: Fines up to CHF 5 million or up to 10% of the annual turnover Sweden: Penalties include fines up to SEK 10 million or 10% of the illicit operation’s value Denmark: Fines up to DKK 10 million or up to 10% of the annual turnover Belgium: Penalties include fines up to €1.25 million or up to 10% of the annual turnover Africa: South Africa: Penalties include fines up to ZAR 100 million or twice the value of the transaction Nigeria: Fines up to NGN 25 million or 10% of the annual turnover (whichever is greater) Kenya: Penalties include fines up to KES 1 million or imprisonment for up to 3 years Egypt: Fines up to EGP 100 million or twice the value of the illicit funds involved Morocco: Penalties include fines up to MAD 5 million or double the amount of illicit funds involved Algeria: Fines up to DZD 20 million or up to double the amount of the illicit operation Tunisia: Penalties include fines up to TND 2 million or twice the amount of illicit funds involved Ghana: Fines up to GHS 10 million or imprisonment for up to 10 years Angola: Penalties include fines up to AOA 100 million or up to 10% of the annual turnover Ivory Coast: Fines up to XOF 100 million or twice the amount of the illicit funds involved South America: Brazil: Penalties include fines up to BRL 20 million or up to 2% of the company’s gross revenue Argentina: Fines up to ARS 150 million or twice the amount of the illicit funds involved Colombia: Penalties include fines up to COP 3 billion or 10% of the illicit transaction’s value Chile: Fines up to CLP 10 million or up to twice the amount of the illicit funds involved. Peru: Penalties include fines up to PEN 10 million or 10% of the illicit operation’s value Venezuela: Fines up to VES 1 billion or up to 10% of the annual turnover Ecuador: Penalties include fines

Overcoming SEPA payment AML challenges with advanced AI

April 13, 2023
The Single Euro Payments Area (SEPA) initiative is helping facilitate the free flow of payments and reduce the complexity of cross-border payments within Europe.  SEPA zone benefits are numerous, but these payments are also creating new challenges for financial institutions and payment service providers to implement effective AML programs. Regulated by the European Payment Council (EPC), SEPA consists of 36 European countries, including several countries which are not part of the euro area or the European Union. SEPA payments are becoming standard in the eurozone. Advantages of the SEPA zone that are driving adoption are numerous:  Speed: Today, SEPA is facilitating fast and efficient cashless payments. SEPA Instant Credit Transfer (SCT Inst) enables parties to move money between two cross-border bank accounts in less than 10 seconds, using no intermediaries, limited to up to 15000 euros. Reduced costs: By simplifying cross-border payments and leveling them with domestic transfers, SCT transfers are processed at domestic rates, SEPA is either free, or costs just one euro, compared with the high-priced SWIFT wire transfers that usually cost up to $50. Expanded business opportunities: By facilitating cross-border payments, SEPA opens new business opportunities for companies operating within the zone contributing to the overall economic growth of the region. Challenges of SEPA regime for financial institutions  Along with the benefits to businesses and consumers, SEPA is creating new challenges for banks and payment service providers when tackling anti-money laundering efforts. Financial institutions participating in the SEPA regime are obligated to uphold a rigorous AML regime in line with the EU’s Fourth Anti-Money Laundering Directive (AMLD4) and the Fifth Anti-Money Laundering Directive (AMLD5).  These directives require financial institutions to implement robust customer due diligence, such as verifying the identity of customers and the source of their funds. They are also required to monitor customer transactions and report any suspicious activity to relevant authorities.  With one zone and fast and easy euro transfers driving fast money transfers and higher volumes of cross-border payment traffic, correspondent banks and payment providers will be challenged to uphold these commitments.  Using legacy AML tools, the number of false positives will hover at around 98-99 %, creating a mounting challenge for transaction monitoring of SEPA transfers.  In addition, the speed of SEPA payments, with near-instant processes, will make it more difficult to detect and spot money laundering and terrorist financing activities.  Diversity of AML regimes Another challenge with SEPA payments is diversity of AML regimes. In the same way the eurozone faces inequality and economic gaps, the level of AML regimes over the 36 countries vary. Countries cannot be judged according to old West-East divisions when banks and payment processing providers are conducting anti-money laundering and KYC procedures. The lowest AML risk level includes countries such as Finland, Sweden and Iceland alongside former eastern European countries Slovakia, Slovenia and Lithuania, according to the 2022 Basel AML rankings. European Countries by AML Risk (Source: At higher risk for money laundering are diverse countries with similar rankings such as Hungary, Bulgaria, Croatia, Italy, Switzerland and