The Grand Duchy continues to expand its fund industry, with private equity and real estate the areas of particular interest, especially from overseas managers looking for a European hubLuxembourg was the first European financial centre to see the potential of cross-border mutual funds, following directives from Brussels during the 1980s. There was an understanding developing in the Grand Duchy of how these products could transform savings and investments for institutions, wealthy investors and ordinary families.

But things have moved on since the first Ucits funds were registered here, investing in equities and bonds. These humble funds eventually embraced cash, derivatives and, more recently, alternative assets.

Currently the most popular spheres for expansion of new products are socially responsible investing and private equity. What is more, managers with head offices in London and elsewhere are looking to reallocate some of their assets around other European centres, relocating some staff and resources to Luxembourg. Brexit is one of the reasons for this, as it is looking more and more likely that UK-based asset managers will lose their treasured, barrier-free access to 27 consumer markets. But also costs and staff shortages elsewhere are directing fund houses to set up operations hubs in a country with room for expansion, regulations and infrastructure specifically targeted to asset management and an increasing body of expertise in fund accounting and risk management.“It’s quite natural that asset managers which need to find a solution for Brexit, as they want to continue serving investors in Europe, would be coming to Luxembourg and either setting up new business or increasing their footprint here,” says Denise Voss, chairman of Alfi, the country’s funds association.

In addition, she confirms the country is increasing its attractiveness to asset managers by developing expertise in sustainable finance and responsible investing. “As an industry, we need to make sure we are actually incorporating sustainable finance and ESG concepts into our investment frameworks because that’s what investors are demanding,” says Ms Voss.

Having recently posted a figure of €4.2tn ($4.9tn) under management, Ms Voss does have some other targets in mind. Currently, Luxembourg is responsible for 11 per cent of assets managed in Europe’s alternative investment funds. She plans to eventually boost that figure to 20 per cent, but admits that this “will take some additional hard work to get there”.

Luxembourg’s knowledge and skills base connected to alternative investments has grown over the last 10 years in particular, says Justin Partington, head of fund solutions at service provider SGG. “The products are in the right place and Luxembourg is capturing market share. There are other domiciles, clearly, in the market, but what Luxembourg does to stand out, is to bring all those elements together in a new packaged way, and of course continue to appeal to EU investors.”Market data, he says, supports the case for alternatives. “There is a strong future ahead for the alternatives industry here in Europe and Luxembourg,” says Mr Partington. While the centre built its reputation through constructing funds investing in bonds and equities, this is not where the latest interest is coming from, says Steve Bernat, CEO of service provider Carne Group in Luxembourg.“If I look at where the most recent growth comes from in the last 18 to 24 months, I would probably say 90 per cent of that growth is coming from the alternative investment fund sector and especially in the illiquid sector, embracing private equity and real estate,” he says. The new cohort of managers launching these funds as yet do not have an international footprint, but have increasing desires to forge a cross-border heritage after enjoying success on home territory, ventures Mr Bernat.Many of the newcomers are US houses. “They have been very successful in the United States, but never looked abroad,” he says. In order to position themselves as managers of alternative assets in Europe, they need to be regulated under AIFMD rules to distribute products, a key reason for them to come to Luxembourg, one of the few jurisdictions to have developed a knowledge and expertise of operating under this rulebook.“Obviously there are the large traditional asset managers, which today wander into the alternative space,” says Mr Bernat. “But then you also have those small boutique managers, who really specialise in a particular asset class, be it private equity, be it real estate, who certainly now see this opportunity to internationalise. If they have this ambition to seek a new revenue stream and come to Europe, that’s where Luxembourg is probably the perfect hub to domicile their fund structures.”While shortage of qualified staff and high costs attached to experienced fund operators might prove a challenge, fast development of technology combined with expertise being built up in the Grand Duchy continues to provide a persuasive story for both fund managers and service providers, he believes.

As a hub which can channel money from savers and investors in developed economies to projects which need inflows in poorer, emerging countries, Luxembourg can prove that it is working towards an efficient, caring global society, rather than draining the economy of revenues, which may have been the image of the centre in previous eras, says Serge Krancenblum, CEO of SGG.“You need an investment hub to do the connecting between the two economies, the country of the investors and the country of the investment, providing the right legal system in a stable environment,” he explains.“Unfortunately, in many emerging economies, there are issues such as corruption,” says Mr Krancenblum. “So you have to make sure that the finance professionals and especially the investor services firms like SGG are going to make sure things are done in a legitimate, compliant manner.” This can be done in conjunction with enhanced due diligence specialists such as Luxembourg-based Sqope.

This new role he is suggesting for Luxembourg and its service providers is not just that of a conduit, but a regulatory-style hub, where the custodians and service providers monitor the behaviour of the fund managers as investors and their transactions, to make sure everything is above board legally. “We are part of the solution for the regulator, we are not part of the problem,” he says, while admitting that public perception is often contrary to this.“That impression is still there, but it will change completely. With the fight against money laundering, there is now a very big difference emerging between investment hubs and tax havens,” he says. “Investment hubs are there to make the connection between different countries. People are going to see hubs like Luxembourg as a facilitation for direct investment,” he says, rather than the old story of tax dodging and “other unfair practices”.The biggest challenge for Luxembourg’s financial centre, agrees Alfi’s Ms Voss, is winning back this public trust. “I still think we need more work to do to gain the trust back of investors and potential investors that we’re a safe place for them to place their money again, for the financial wellbeing in the future,” she says, adding that Luxembourg must continue in its task of explaining its value and its role as an investment hub to the public.To summarise, fund managers and private bankers seeking to perhaps relocate some of their services after Brexit might look to Luxembourg for unfettered access to the European distribution market and for innovation in products in areas such as private equity and socially responsible investments.But there is more to the story than this. Many voices in Luxembourg are looking to rebrand the entire financial services industry, having grown sick of its deservedly poor image among investors. They see a need to consign the notion of an inter-connected cartel of poor performing, high-charging fund houses to the dustbin of European history and to replace it with a socially responsible system that will work to benefit society, with the expertise centred, of course, in Luxembourg.

Full article HERE

Dear Friends and Colleagues,

As we head into the new fiscal year, alarm bells on money laundering failures have been sounded from Hon

g Kong to Ireland and numerous jurisdictions in between. The consequences have been grave; ranging from billions in fraud proceeds laundered to national security failures due to terrorism funding.

This comes despite a renewed drive this summer, particularly in the European Union, to beef up money laundering controls with new regulations. But with each new banking scandal, scrutinizing media article, and watchdog report; its becoming increasingly clear that governmental institutions are still playing catch-up in the fight against global money laundering.

At Sqope, we’re heading into the new year with new tools to enable financial institutions to shield themselves from the threat of money laundering:

Expert KYC training

Sqope’s due diligence expert analysts are touring Europe this year, sharing their global expertise in flagging money laundering risks and reputation exposure. Available seminars include cyber-research workshops for compliance officers and front-desk staff and regionally-focused anti-money laundering presentations on emerging markets.

For more information on our on-site seminars, contact info@sqope.lu

New online KYC platform

Coming soon: Financial institutions from across the world will have rapid, direct, and easy access to Sqope’s range of KYC and monitoring solutions. Account holders will be able to chat directly with our representatives, monitor the progress of their KYC project, and conduct monitoring on existing clients.

Stay tuned for updates on the launch of our new ordering platform

Read the rest of the newsletter HERE.

The Sqope Team.

Dear Friends and Colleagues,

May 2018 brought a wave of new Iran sanctions dynamics following the US government’s announcement that it will withdraw from the 2015 Joint Comprehensive Plan of Action (JCPOA). Global companies, financial institutions, and sovereign governments reacted with a broad variety of measures, ranging from cancellation of planned investments to outright disregard of planned US sanctions. Elsewhere, we took note of US prosecutorial scrutiny of a Maltese private bank, updated client due diligence (CDD) rules released by the US Treasury’s Financial Crimes Enforcement Network (FinCEN), and a revised European anti-money laundering directive that may impact clients in the Netherlands, among other issues. Our research and analysis team continues to follow the key issues, assess their credibility and relevance, and implement our findings into our reports for clients.

The Sqope Team

ANALYSIS: INTERNATIONAL REACTIONS TO IRAN SANCTIONS

Renewed US sanctions on Iran have prompted widely different reactions from global corporations and sovereign governments: the Russian Federation’s second largest oil producer Lukoil announced it would not proceed with development projects in Iran due to the threat of US sanctions. Complications arose for small-sized German banks that pursued business with Iran following the 2016- implemented nuclear deal, despite reports that six small credit unions – known as Volksbanken – in southern Germany planned to continue processing payments to Iran and provide trade finance services until August. French oil multinational Total threatened to withdraw from a USD 2 billion natural gas drilling and construction project in Iran unless it received a sanctions waiver from US President Donald TRUMP and reportedly also sought French government support. Meanwhile, the Swiss Banque de Commerce et de Placements (BCP) announced on May 30 that it had suspended new transactions with Iran and is retreating from Iran-exposed activities.

In the US, aircraft manufacturer Boeing was the hardest hit with USD 20 billion in aircraft deals with Iran, for which it received export licenses from US regulators in 2016, reportedly in limbo. Senior advisor to French president Emmanuel MACRON characterized the threat of US sanctions on European companies trading with Iran and aluminum and steel export tariffs as a “test of European sovereignty.” The advisor predicted a firm response and denied any signs of division among European nations on the issue, while other reporting suggested pro-American EU states such as Lithuania, Poland, the Czech Republic, Hungary, Latvia, Poland, and Romania would adopt a more nuanced approach in light of strategic transatlantic diplomatic and government relations. India, an established purchaser of Iranian and Venezuelan oil, reportedly planned to wholly ignore US sanctions against Iran.

Read the rest of the newsletter HERE

Read the rest of the Newsletter HERE

Dear Friends and Colleagues,

Our fourth newsletter of 2018 is dedicated to navigating recent developments in the Russian and CIS markets. The shockwaves caused by new US sanctions in April highlight the need for constant monitoring, flexibility and evaluation of clients exposed to these jurisdictions.

To match these challenges, Sqope has recently added additional premium resources to our CIS desk, enabling our expert analysts access to new databases and on-site resources to better serve you.

The Sqope Team

RUSSIAN SANCTIONS: WHERE DO WE GO FROM HERE?

Current Situation

On 06 April 2018, the US levied sanctions against a number of major powerbrokers and Kremlin insiders, such as billionaire Oleg DERIPASKA and the head of Russian state energy giant Gazprom, Alexey MILLER. 14 companies were also hit with these new sanctions, including DERIPASKA’s aluminum giant Rusal and Gazprom Burenie. These sanctions have since been dubbed as the most significant since the start of the 2014 Ukraine conflict.

Shockwave felt by sanctions

The share value of the publicly-listed companies that were hit with sanctions plummeted – Rusal, for example, lost more than 60% of its share value and EN+ Group lost more than half of its value, according to reports from 24 April.

Press coverage focused mainly on the impact on DERIPASKA’s companies because they are publicly traded, representing the first time the US has ever sanctioned a publicly listed Russian company, according to at least one news outlet.

The sanctions have also caused alarm among Russia’s business elite ‘that anybody with frequent interaction with the Russian leadership and a dominant position in Russian business could be hit.’

Alarm bells have also sounded among those investing in Russia, “as they scramble to clear their portfolios of ‘oligarch risk’ - holdings in companies that may be next in line for U.S. sanctions after metals company Rusal was targeted," according to Reuters.

What’s next?

European Union: A consensus to match the US sanctions is unlikely, as France and Germany pressure the US to shield their economies from financial impact. Halfway measures, such as the extension of existing sanctions, or the tightening of AML regulations, are possible.

Russia: There is speculation that the Kremlin could use sanctions to further consolidate its economic control in the country, in what some analysts call an effort to ‘nationalize the country’s elites,’ in a reference to possible state plans to purchase DERIPASKA’s stake in Rusal.

United States: The next moves against Russia will continue to be muddled by jostling between the White House and Washington’s policy power brokers, particularly given the unintended negative fallout from the Rusal case. Russian foreign policy moves in Europe, Syria, and the Ukraine may have an impact, although internal US economic considerations linked to Trump’s economic worldview and personal outlook toward Russia will likely serve as dominant influences.

How Sqope supports your business in Russia:

Due Diligence reports that map links between prospects and Russian power brokers;Ongoing monitoring of large client bases and ad-hoc screening for sanctions exposure;Source of Wealth reports tracing historical and current sources of funds using Sqope’s exclusive network of ground sources and database access.

Read the rest of Sqope's April Newsletter HERE.

Roger Hartmann is a member of the supervisory boards of Sqope SA, the leading AML reputation firm, and of Label R, the unique global ESG certification for funds investing in sensitive zones. As Chairman of the Private Banking Group at ICMA, Roger has been at the forefront of the fight for tax compliance.

In this exclusive interview, Roger explains what has inspired him to be one of the speakers at the inaugural SGG Crossroads conference and the importance of the financial industry of having a strong compliance framework.

1. What attracted you to become part of SGG Crossroads conference?

SGG Crossroads is all about promoting Sustainability in the financial industry. In this sense, I have been a strong believer for quite some time in the positive contribution that the financial industry can bring to a more fair and ethical society. This platform is therefore very relevant to me.

2. What is your view of the efforts made by the funds industry to date to incorporate sustainability into their processes and practices?

The intermediary role of the financial industry in promoting best practices is very important. We can channel leadership in bringing new positive ideas to the table. It is important in this sense to go beyond the “green washing”, and to really prove to potential and existing investors that Investment Funds comply with strict ESG standards and policies. With the help of the Investment Fund cluster, which acts as a gatekeeper, and with specialised firms like Label R and Sqope, Funds can definitely demonstrate that they comply with all ESG guidelines.

3. How can the funds industry be persuaded to think more about sustainability and not only profit?

If the environment is changing, the human being will change too. We are today aware that too many investment flows bring more profit, but they are also putting the environment under pressure. This is why a change of perspective, a change in our way of looking at things, is necessary. It is already happening for institutional investors, be they Sovereign Wealth Funds or Family Offices. They are putting a lot of pressure on fund managers to make sure that Sustainability is an important component when they have to take investment decisions.

4. You are involved in Sqope, a leading provider of advanced Due Diligence Reports. What is the importance of compliance in today’s financial world?

Sqope supports the financial industry, banks, external asset managers, investment funds, administrators, in complying with ethical principles and regulations, preventing money laundering, anti-corruption and terrorism financing. Those professionals are now convinced that they cannot afford to risk their reputations and to befined heavily and, therefore, invest heavily in making sure they stay compliant. You need 20 years to build a robust reputation and a couple of minutes to destroy it. The financial industry needs solutions to deal with the on-boarding of clients and investors and they need also enhanced reputation checks when they invest in a target.

Roger Hartmann Member of the supervisory boards of Sqope SA and Label R, and Chairman of the Private Banking Group at ICMA

Read the full interview HERE

Dear Friends and Colleagues,

Over the past few months we’ve seen scandal after scandal and leak after leak, shake our industry. But while these developments generated dramatic headlines, in many cases their adverse impact on the reputations of many high-networth clientele was overhyped.

Take for example, the Kremlin List (reported in our previous newsletter).

While we still have not seen the implications of the classified list, the broad and seemingly haphazard-makeup of the unclassified list released in January has led many analysts to denounce its potential to trigger sanctions or even reputation damage to those on it.

The second newsletter of 2018 is dedicated to helping you monitor our constantly-changing political and regulatory environment.

The Sqope Team

CASE STUDY:

PROVIDING ACTIONABLE EARLY WARNING WITH EFFECTIVE CLIENT SCREENING

In an age where breaking news goes viral around the world days before it reaches the mainstream media, conventional alerts from traditional news mediums are no longer sufficient in providing effective early warning about reputational and regulatory issues impacting your clients and partners.

The Solution: Break the norms of traditional screening, get bold with Social Media.

We’ve used Twitter and other Social Media forums to track the reputational status of our clients’ counterparties in real time. Using these tools, we were able to:

Alert a Private Bank to a bribery case involving one of their clients just after it appeared in local African media.

Monitor a high-profile dispute between an UHNWI and his celebrity spouse, and alert just as charges were filed.

Identify when a Saudi Prince was released from detainment immediately during the Saudi corruption purge according to credible, aggregated social media ‘chatter.’

Report a new criminal investigation against an eastern European millionaire exposed in the Panama Papers on the day it happened.

But while Social Media offers faster reporting, it requires careful attention and analysis. Each post-er must be vetted for credibility, and post must be cross-referenced. Keyword searches should be targeted, in order to avoid an overload in alerts.

For more information regarding effective, pro-active client screening, including our Enhanced Screening Tool, contact ilanakrancenblum@sqope.lu

Read the rest of the newsletter HERE.

The U.S. Treasury has submitted to Congress the “Kremlin report”, it is 210 names

In the list, in particular, were Prime Minister Dmitry Medvedev and members of the Cabinet, a Kremlin spokesman, Dmitry Peskov, presidential aide Vladislav Surkov, and Federation Council speaker Valentina Matvienko.

Dear Friends and Colleagues,

To kick off the new year, we're pleased to introduce new business-driving intelligence solutions and enhancements to our existing products.

Our first newsletter of 2018 is devoted to demonstrating how we've turned your valued feedback into solutions that further drive and empower your decisions.

As always we're pleased to keep you updated with the latest developments regarding compliance, sanctions, and other related topics.

The Sqope Team.

INTRODUCING: OUR ENHANCED SOURCE OF WEALTH REPORT

Tailored to the needs of both Front Desk and Compliance departments, Sqope Source of Wealth reports examine a potential prospect’s professional, family, and wealth background to determine their net worth and ensure their liquid assets can be traced to transparent and accountable sources.

What we provide:

Comprehensive life story

Detailed information on family wealth, professional beginnings

Detailed profiles and estimates on current income sources

New business opportunities through identification of business partners

Net worth and asset estimation

Visual, photographic, aesthetically pleasing layout

Advantage in emerging markets

Fast delivery time

To learn more, please contact: info@sqope.lu

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Read the full January 2018 newsletter HERE

Dear friends and colleagues,

As we look ahead to 2018, we’re confronted by both challenges and opportunities. Addressed in our final newsletter of 2017 are mounting US sanctions, tightening regulations, the emergence of new financial technologies; which pose just some of the compliance challenges on our horizon.

We wish you easy reading, happy holidays, and a prosperous new year.

The Sqope Team.

ANTICIPATING WASHINGTON'S "KREMLIN REPORT" - A PROACTIVE APPROACH

In its latest round of sanctions against Russia, the US government enacted the bill ‘Countering America’s Adversaries Through Sanctions’ (CAATSA) in August 2017. While the law both expands and entrenches punitive measures already in place, section 241 calls for a report to identify and list Russia’s top powerbrokers within 180 days – the prospect of which has generated significant media attention focusing on the consternation of the country’s elite over their future sanctions exposure.

“The Kremlin Report”

Specifically, section 241 of CAATSA tasks the US government with compiling a list to identify Russia’s ‘most significant senior foreign political figures and oligarchs’ based on their proximity to the Kremlin – likely as per both documented and alleged ties – as well as their net worth. The report (referred to by some in Washington as “The Kremlin Report”) which is to be submitted by February 2018, will detail information that Russia’s rich and powerful generally prefer to shield from the public eye, including their links to President PUTIN and details concerning their fortune and sources of wealth. A similar list will also identify ‘parastatal’ entities and their ultimate beneficial owners.

Policy analysts have suggested that several criteria be put in place to determine who is named:

1. ‘Those responsible for aggressive, corrupt or criminal operations within or outside of Russia’ 2. ‘Putin’s close circle of allies from St. Petersburg, with whom he has done business since the early 1990s'

3. ’Golden children’ of the elite who may be linked to their parents’ wealth'

4. ‘Personal friends of Putin who, to shield the president from scrutiny, hold considerable wealth for him’

5. ‘So-called oligarchs: big businessmen profiting greatly from direct business with the Kremlin’

6. Allegedly ‘corrupt state enterprise managers who owe their positions to their close personal relations with Putin and utilize their positions for gross larceny and;

7. ‘The relevant companies owned by these people.’

Read the full Newsletter HERE

Dear clients, colleagues and friends,

We’re pleased to send you this month’s newsletter to keep you up to date on the latest AML & compliance related news.

This month witnessed two major headline-grabbing developments that shook our industry: the Paradise Papers data leak, and an unprecedented "anti-corruption purge" in Saudi Arabia.

But just as you wouldn't judge a book by its cover, we shouldn't judge a scandal by its headline -- this month's newsletter will help you navigate the new reputational risks posed bythese breaking news stories. We wish you an easy reading.

The Sqope team.

Job description:

We are looking for an experienced sales & relationship manager (B2B) in Luxembourg who wants to support the further growth of SQOPE S.A. by applying proven sales & relationship management skills in a nascent and fast-growing environment of CyberSearch in the field of KYC/AML/EDD for the global finance industry.

Your Main Tasks:

Define and execute the sales strategy in the relevant marketsCollaborate with other Sales Managers to win global leads in various marketsThe sales person should be able to do both, source new accounts and deepen and maintain a long-term relationshipAssume the responsibility for certain products/services as product leader for the sales campaign process and liaise and coordinate with other team membersProvide market intelligence to the production team in order to develop new products and services

Your Experience and Skills:

Min 3 years of financial industry experience (Trust Company, Family Office, Asset Manager, Private Banking, PSF) with a proven track record in Sales and Key Account management (B2B or B2C)Business enabler with a strong understanding of the KYC/AML/EDD implications/requirements.Strong negotiating and training skills with the ability to encourage and work with different stakeholders in a multicultural environmentProject Management drivenGood communicator and a team player with excellent oral and written English and French skills, fluency in Dutch would be an assetSelf-starter who is used to and able to work independently and take initiativeFast-paced entrepreneur mind-setProblem solver, being curious and willing to learn (RegTech - CyberSearch technologies)Ability and willingness to travel.

Location: Luxembourg city

Payment: Base salary plus commission

Contract Type: Permanent Contract (with a 6 months trial period)

Hours: Full Time

Contact: career@sqope.lu

On the evening of November 5, 2017, the International Consortium of Investigative Journalists (known for the Panama Papers and other breaches) began to publicize a new, massive offshore data breach, this time exposing over 13.4 million records belonging to the Bermuda-based Appleby Law firm and Estra Corporate Services provider.

Within less than 12 hours, the first data-leak releases have made headlines across the world, in over 90 leading news outlets that pre-coordinated their release with the ICIJ. Files exposed will reportedly discuss the offshore interests and activities of more than 120 politically-exposed persons from five continents.Over 100 multinational corporations are also featured for their offshore activities.Over 7 million records from Appleby’s exposed stretch from 1950 to 2016, and include emails, loan statements (some over 1 billion USD), involving at least 25,000 companies, and connected to people in over 180 countries. Exposure of some entities to nefarious activities relating to sanctions and tax evasion.In terms of numbers of files, the ICIJ has confirmed to us that this is the largest data breach conducted thus far.

Release schedule

The ICIJ added new information from the Paradise Papers to its existing database on 5 November 2017, mainly on high-level politicians mentioned in the breach. This information will then be fused with previous leaks. Additional information is expected to be publicized “in the coming weeks” likely as part of a strategy to enable an ongoing news-cycle surrounding the breach.

Expected impact on compliance departments

As we’ve seen with the Panama Papers, Bahamasleaks, and other breaches; the so-called ParadisePapers breach is likely to be gradually revealed, drawing the interest of international news media and impacting local politics for the coming weeks and months. Compliance departments will be faced with the following challenges:

Monitoring if their clients, counterparties, employees, or branches are mentioned in the databreach as it is gradually made publicIdentifying and analyzing the spin-off risk caused by media coverage of these releases in local mediaUnderstanding whether mentions of their counterparties have a regulatory impact due to nefarious activities, or related accusations.

MITIGATING YOUR RISK, ENABLING YOUR BUSINESS

Sqope continues to monitor the impact of the Paradise Papers in order to proactively enable our clients to navigate any reputation and compliance risks posed by their clients and partners. This includes:

Screening-Checks on client lists or business partners to identify and alert potential direct exposure.Reputation-focused due diligence, reports that tackle any exposure to this current databreach, and those that have preceded it, in order to properly identify risk posed by your counterparties. Sqope View monitoring tool: Constant checks on individuals who were subjects to a previous Sqope Report.Tailor-made Solutions: Utilizing our unique cyber methodology, proprietary source database, and global network of investigators.

Our research center continues to monitor the Paradise Papers as they are gradually released, while our sales representatives are standing by to assist our clients with our solutions.

, which provides global certification for ethical companies and funds, particularly those operating in sensitive and emerging markets. “In recent years, Sqope has proven its ability to navigate the world’s most complex jurisdictions to provide our clients with top-end risk management solutions,” said Simon Bodjanski, CEO of Sqope; “partnering with Label R presents yet another outlet to help business players stay compliant and maintain a positive reputation by bringing clarity to their operating partners and environments.”

The partnership will focus on the provision of reputation-focused due diligence services to corporations and funds seeking to be certified by Label R in the areas of business ethics, anti-money laundering, anti-bribery, fair financial practices, environmental impact, and other key good governance issues. “We view Sqope as a natural partner,” said Oriane Schoonbroodt, Co-Founder & Executive Director of Label R; “with the combination of Sqope’s robust research capabilities and innovative approach, we’ve added another potent tool to help us fix the problems plaguing developing markets across the world.”

www.label-r.org

We’re looking for experienced professionals who can help us shape the future of our company. As we embrace a new dynamic business strategy, we have a wealth of opportunities for new people with fresh perspectives and ambitions.

Currently we are expanding in the United Kingdom, and Singapore. Therefore if you are the right fit in those jurisdictions please do not hesitate to submit us your resume.

Job requirements: • University degree in Management, Economics or Law; • Being an autonomous entrepreneurial driven person with high self-discipline and representative skills are a must; • Understanding KYC and AML regulations that govern the international finance industry; • Experience in sales at C-level;

• Having an established business network in the local finance industry; • The sales person should be able to do both, open new accounts and deepen and maintain the long term relationship with the clients;

Please follow us on LinkedIn to stay up to date on our latest news, including specific job openings. We also encourage you to subscribe to our newsletter where we share information and insight on top-of-mind Compliance/AML issues.

The global financial crisis served as a catalyst for sweeping regulatory changes that show no sign of fading, in particular regulations concerning international information exchange. Furthermore, following a series of leaks that exposed the sheer volume of capital stashed offshore (‘Swiss-leaks’, ‘offshore-leaks’ and ‘Panama Papers’) as well as sweetheart tax deals awarded to major corporations and heads of state, subsequently regulators radically changed the rules of the game, introducing unprecedented levels of trans-national transparency. To enforce these new measures, regulators levied harsh sanctions against financial institutions for failing to stay abreast of the exact tax, legal, and/or political exposure of their customers. At the same time, thanks to the ‘information revolution’ and the nature of today’s ‘global village’, regulators have also raised their expectations regarding the intelligence financial institutions should gather on their customers.

The past few years have corroborated the worst fears of secrecy-based professions – secrets will inevitably become public knowledge. ‘Panama Papers’ – the latest major leak to date - destroyed what was seen as one the ultimate ways of shielding beneficial ownership. Luxembourg’s financial industry is closely linked to international markets, including markets in key developing nations, and is subsequently exposed to major compliance risks such as corruption, bribery and unorthodox commercial practices. As such, Luxembourg’s financial community must further develop its compliance expertise. Major compliance vendors – external to the financial institutions themselves – serve as an excellent solution to today’s dynamic regulatory environment.

Luxembourg, as one of the world’s leading financial centres, will see increasing global transparency requirements for account holder information that will require global scalable solutions. The underlying challenges include timely reporting, relationships with multiple authorities, compliance cost increase and complying with data-privacy laws.

« When transparency reflects reputation management concerns – Better safe than sorry »

Reputation risk often tops the list of worries keeping senior executives and board members up at night. This is particularly the case in our new global environment, where incidents and decisions that would escape notice five years ago, now instantly find a global audience within minutes, ready to take organizations and even countries to task within hours and often with serious repercussions. Not incidentally, reputation risk usually falls outside traditional risk management frameworks and Enterprise Risk Management (ERM) capabilities. Yet reputation risk must be proactively managed as it has the ability to damage brands, lines of business, and entire organizations.

As with most risks, the sooner the reputation risk is recognized and addressed, the better. The traditional approach to managing reputation risk focuses mainly on cultivating a good reputation and then countering crises and setbacks as they arise through effective communication. While essential, these activities are no longer enough.

The latest scandals show how important it is to anticipate reputation exposure before a crisis occurs and highlight the challenge of executing enhanced due diligence as part of the protocol for prospect on-boarding and existing client screening.

« The need to do business vs. the need to be compliant »

The underlying need is still – and will be – to create new business opportunities and accept new clients. In order for the Luxembourg financial industry to compete in the increasingly challenging landscape, it cannot turn its back on ‘riskier’ revenue yielding regions in the developing world. The inherent tension between drawing business from « non-traditional » markets and risk control forces the financial sector to turn to new specialized risk mitigation players. These experts must provide a level of quality as demanding as the constraints faced by the compliance professional, but also provide a balanced and holistic picture of relative risk, separating facts from unproven allegations.

As today’s regulator environment grows increasingly stringent, Luxembourg’s financial community must take measures to ensure that its compliance practices are one step ahead.

Additionally, KYC vendors play an important role in mitigating risk to allow the local financial industry to boldly expand into new markets. By “knowing” the new markets, its key players and inherent risks, decision makers - equipped with information to avoid pitfalls and recognize opportunities - can bravely venture into ‘riskier’ lucrative markets.

« Third Parties to serve the highest demands: How can the industry help to support the Compliance in their mission of excellence? »

The right capabilities, enabled by innovative technologies, can position the organization to identify, detect, monitor, mitigate, and manage reputation and strategic risk more proactively and objectively than traditional in-house professionals and reactive communication. As access to information and data grows, the need for professional analysts who can contextualize and analyze information using a broad spectrum of sources has become crucial.

The recognition that third parties are key in assisting the financial industry to maintain an adequate level of compliance calls on the regulators to recognize the new growing sector and enable it to fulfil its mission. For instance, the fourth EU Anti-Money Laundering Directive (AMLD) calls for establishing a UBO register. To date the register is set to be accessible to competent authorities, FIUs, obliged entities such as banks, notaries and lawyers conducting their “customer due diligence” duties and any person that demonstrates a “legitimate interest”. “Special Interest” is deemed as including investigative journalists, however it is imperative that it gives access to accredited due diligence providers in order to assist “obliged entities” meet their requirements.

« Hand in hand with the regulator…»

Luxembourg’s government, the regulator and the local actors have joined efforts in order to put in place the best practices to strengthen compliance procedures, de facto creating a new industry for reputation management. This new sector has given way to a favourable environment, providing tools to the financial industry that allow it to expand to emerging markets and sectors that would have otherwise been too «risky ». It is time to face reality and recognize (and regulate) this new sector so that the financial industry can enjoy greater confidence when confiding with such third parties, create a base line for information security and privacy and enable the accredited providers access to information as part of the information sharing revolution.

Simon Bodjanski

Chief Executive Officer of Sqope

A Luxembourg court handed down suspended sentences to the two former PricewaterhouseCoopers employees behind the “LuxLeaks” revelations Antoine DELTOUR and Raphael HALET on 29.06.2016. The whistleblowers received 12 months and 9 months respectively. The French journalist who first exposed the story, however, was acquitted the same day.

Media organizations and rights groups condemned the rulings against DELTOUR and HALET, both of whom had faced a maximum sentence of ten years in prison for the charges.