Anti Money Laundering & Counter Terrorist Financing

Start Dates: 14/05/2019

Duration: 2 days: 9.30am to 5.30pm

Location: TBC (Central Dublin)

Full Fee: €1200

Network Members Fee: €700

Programme overview

Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become one of the key strategic imperatives for all financial institutions. The reputational damage and not to mention the fines imposed for non-compliance are huge concerns.

At the heart of all FCC systems is a Risk Based Approach. This compels institutions to identify where they think the greatest AML risks lie within their client base and to show that the systems and processes used to manage and mitigate those risks are fit for purpose.

The challenge facing most institutions is – where do we start? This course deals with this in considerable detail outlining the steps necessary to create a viable and acceptable system. Institutions need to demonstrate clear, logical, precise, easy to understand and easy to audit systems and procedures that identify AML and sanctions risks effectively.

 

 

Learning outcomes

Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become one of the key strategic imperatives for all financial institutions. The reputational damage and not to mention the fines imposed for non-compliance are huge concerns. It is fair to say that institutions are being micro-managed by regulators in this area and are being set exceptionally high standards for compliance. This process looks set to continue for some time yet.

At the heart of all FCC systems is a Risk Based Approach. This compels institutions to identify where they think the greatest AML risks lie within their client base and to show that the systems and processes used to manage and mitigate those risks are fit for purpose. This should result in a broad approach to Standard AML risk clients, a closer and more detailed approach to Medium risk clients and an intrusive and comprehensive approach to High risk clients (enhanced due diligence EDD).

The challenge facing most institutions is – where do we start? This course deals with this in considerable detail outlining the steps necessary to create a viable and acceptable system. Institutions need to demonstrate clear, logical, precise, easy to understand and easy to audit systems and procedures that identify AML and sanctions risks effectively.

An effective, fit for purpose, Risk Based Approach should drive four key components of the Customer Due Diligence process. First who is responsible for on-boarding and signing off new clients, second, the level and intensity of the CDD process, third the frequency of reviews, including the recent move towards “trigger” events  and lastly the fine tuning of transaction monitoring once a relationship is established.

Who is the course for

All staff working within any of the three lines of defence. This includes delegates with client facing responsibilities especially those where financial crime is a real and active risk. Risk and compliance professionals, MLROs and members of the internal audit function. Senior managers and top management would also derive considerable benefit from attending as they are the ultimate risk owners.

Course Content

Introduction:

  • What is Financial Crime
  • Predicate Crimes
  • What are financial institutions required to put in place – overview
  • What is CDD, KYC, IDV
  • Who is responsible for FC Compliance?
  • Best Practice/Poor practice

 

Who Sets the Rules and Who Publishes Best Practice Guidelines?

  • Home Regulator
  • UN, EEC
  • USA – OFAC
  • BIS – Basel
  • Local Jurisdictions
  • Best Practice Guidelines
  • FATF, Wolfsberg Group, Transparency International, Egmont Group

What Must Institutions Have in Place

  • The regulatory landscape
  • Rules and Instructions
  • Traditional three lines of defence model
  • Escalation process
  • Consent and Tipping Off
  • Risk based due diligence

  Risk Based Approach

  • What does this mean
  • How should it work
  • What are the key differences
  • Enhanced Due diligence – what does this mean

 

Risk Based Approach Methodology

  • Constructing a formula to pre categorise potential clients
  • Independent of the first and second lines?
  • Client types
  • Lines of business
  • Products used
  • Delivery channels
  • Geographic location
  • Occupation
  • Mandatory high risk clients
  • Intra –risk migration – does this happen often enough

 

Risk Based Approach Drivers

  • Client onboarding and account sign off responsibilities
  • Level of CDD
  • Review process
  • Trigger events to accelerate the review
  • Transaction monitoring
  • Keeping robust and comprehensive records

Counter/Anti-Terrorism Financing

  • What are the particular challenges
  • Legitimate source/ criminal outcome
  • Can we a adopt a risk based approach
  • Level of CDD
  • Screening systems
  • Charities / Non-Profit Organisation
  • Keeping robust and comprehensive records

Sanctions – Brief Overview

  • Who sets them & why are they set
  • Who is impacted, What are they
  • OFAC
  • How should an institution screen for them
  • Can we adopt a risk based approach when tolerance is zero?

 

Risk Based Approach to Customer Due Diligence

  • KYC – getting to know the customer
  • IDV – checking what they say
  • Ultimate Beneficial Ownership
  • Source of Wealth
  • Source of funds
  • Review process
  • Trigger Events
  • Remediation process

 

Risk Based Approach to Politically Exposed Persons

  • Definition – formal
  • Definition using a risk based approach
  • Why are they a special case
  • Mandatory high risk
  • UBO issues
  • Source of Wealth issues
  • Annual Review issues
  • Imminent changes

Specific Identification & Verification Issues

  • Trust nominee and fiduciary accounts
  • Corporate vehicles
  • Introduced business
  • Client accounts opened by professional intermediaries
  • Non face to face customers
  • Correspondent banking – KYC requirements and Due Diligence
  • Introduced business

 

Risk Based Approach to Constructing the FCC Framework

  • Policies
  • Roles and Responsibilities
  • Senior Management and M.I. requirements
  • The MLRO (or equivalent) challenge!
  • Risk Assessments and Procedures
  • Suspicious transactions

 

Suspicion & Escalation

  • What must banks have in place
  • An effective escalation process
  • Concern
  • Suspicion
  • Access & Process
  • Communication lines
  • Suspicious Activity Reports / Suspicious Transaction Report
  • The importance of a direct link
  • Whistle blowing

Risk Based Approach to Managing Methods of Money Laundering

  • Trade Finance
  • Private Banking & Wealth Management
  • Electronic Funds Transfer
  • Correspondent Banking
  • Payable Through Accounts
  • Downstream Correspondent Clearer
  • Concentration Accounts
  • Private Banking
  • Structuring
  • Bank complicity
  • Credit Cards
  • Money Remitters & Money Exchange Houses
  • Insurance Companies
  • Securities Broker-Dealers
  • Casinos & Gambling businesses
  • Dealers in High-Value items (Art, Jewellery, Precious Metals etc)
  • Travel Agencies
  • Vehicle Sellers
  • Notaries, Accountants, Lawyers, Auditors
  • Real Estate
  • Loan Back Method
  • Import/Export Transactions

 

Cyber Risks – New Technologies

  • Internet Banking
  • Internet Casinos
  • Prepaid Cards and E-Cash

A Risk Based Approach to Legitimate but Potentially High Risk Structures That Hide UBO

  • Shell companies
  • Trusts
  • Bearer Bonds & Securities

 

ML/TF Typologies and Trends (Methods, Techniques, Schemes and Instruments)

  • Attempting to circumvent client identification requirements
  • Smurfing, using nominees and/or other proxies
  • Ghost elements
  • Co-Mingling
  • Multiple banking
  • Use of a Broker account with little trading
  • Activity of Wash Trading

 

Developing a Risk Rating Framework/Criteria/ Financial Crime Analysis

Know Your Employee Program

  • Screening

AML Training

  • Mandatory
  • Basic elements
  • Staff Training – Who, What, How, When & Where

 

Electronic AML Solution

  • Benefits
  • Functional components

 

Open Forum Talking Points

  • AML Policies and Procedures – What is the difference and why are they important?
  • Probability of an offence crystallising
  • Risk of not reporting
  • Understanding what ML & TF is – dispelling the myths!
  • Government and other Sanction risk in practice
  • Understanding the difference between KYC – ID&V – CDD
  • Profiling customers – what does it mean?
  • What do you do if you are suspicious
  • Recognising and handling suspicious transaction reports
  • Human factors in money laundering risk management
  • Abuse of structures and financial services provider

Trainer:  Mark Andrews

Mark joined Lloyds Bank after a brief career in the navy. Appointed as one of the first managers in the bank’s Corporate Banking Division (at that time a pioneering development – offering relationship managers to the bank’s largest corporate clients), his duties included corporate lending, cash management and payment services, investment appraisals, treasury services and credit control for global clients.

He was appointed as one of the youngest Lloyds London City branch managers specialising in lending to employees of international bank clients and money market institutions. Mark was then promoted into the role of Commercial Service Manager (another pioneering development – now the norm) offering senior relationship managers to middle market corporate and private clients. His duties included all aspects of lending control and the supervision at area level of lending by five retail branches which reported to him. Mark was subsequently promoted back to the Corporate Banking Division as a senior corporate manager responsible for more complex cash management, payments, treasury, banking, trade finance and investment requirements of the bank’s largest clients. His particular client grouping included global energy companies, hotel groups, and construction companies.

In 1990 (until 2001) Mark was head-hunted as a Director of Granville Bank – a private bank which specialised in client wealth management, secured lending, trade, investment and treasury business. Within two years he became a main board director of Granville Holdings Plc, the parent company, a London City based merchant bank providing the usual comprehensive range of corporate services including stockbroking.

Since leaving the banking industry Mark has established and successfully developed his own trade finance, private banking, global banking, investment management and financial consultancy and has lectured extensively in the UK, USA, Europe, Africa, Asia and the Middle East.  Mark is an expert on all aspects of corporate, retail, investment and private banking and is also a subject specialist in trade finance, financial crime compliance, cash management & treasury services, regulatory issues, risk management, ICAAP, ERM, Islamic banking and finance.

Mark is a “Master Trainer” for one of the world’s largest learning faculties.