Anti Money Laundering Presentation

Audrius Šapola Head of security department

Physical security

Information security

Fraud prevention

Prevention of money laundering and terrorist financing

How it affects financial institutions? What is money laundering and terrorist financing?

“ Behind every great fortune there is a crime” Honore de Balzac

What i s money laundering?

“ Money laundering is any action taken to conceal, arrange, use or possess the proceeds of any criminal conduct ” Serious Organised Crime Agency, UK

“ Money laundering is the name given to the process by which illegally obtained funds are given the appearance of having been legitimately obtained ” Australian Transaction Reports and Analysis Centre

“ Money laundering is the method by which criminals disguise the illegal origins of their wealth and protect their asset bases, so as to avoid suspicion of law enforcement and to prevent leaving a trail of incriminating evidence ” United Nations Office on Drugs and Crime

“ I am like any other man. All I do is supply a demand” Al Capone

Human trafficking Arms smuggling Tax evasion Drug trafficking Corrupt practices Theft Fraud Robbery Prostitution

“ Funds laundered in the world could range between two and five per cent of the world’s gross domestic product . Using 1996 statistics, these percentages would Approximate between US $ 590 billion and U.S. $ 1.5 trillion ” International Monetary Fund

® Hide wealth ® Avoid prosecution ® Evade taxes ® Increase profits ® Become legitimate Why?

laundering process

# placement

smurfing

smurfing explained

electronic transfer

gambling

# layering

electronic funds transfer

# integration

credit and debit cards

terrorist financing

® Recruit and sustain ® Acquire influence ® Build support base ® Carry out terrorism Why?

“ Follow the money” - Deep Throat

hawala

money laundering vs. terrorist financing

standard setters

The Basel Committee on Banking Supervision

The Egmont Group

What’s in it for the bank?

what risks?

5

operational risk

legal risk

financial and concentration risk

“ It takes 20 years to build a reputation and five minutes to ruin it” Warren Buffet

risk assessment

k now y our c ustomer

p olitically e xposed p ersons

correspondent banking requirements

screening and monitoring

ERASE Risk Analysis ERASE Profiling Alert Generation User View Data reduction & increased accuracy Transactions Profiles $ $ $ $ $ $ $ $ Risk Views ERASE Risk Views Alerts ! ! ! ! !