The document discusses anti-money laundering and know your customer (KYC) procedures. It describes the three stages of money laundering - placement, layering, and integration. It outlines red flags such as high value withdrawals soon after investment or unusual sources/destinations of funds. It emphasizes the importance of reporting suspicious transactions and not tipping off customers. The document also discusses KYC procedures like verifying customer identity and address and understanding their needs and expected business.
The document discusses money laundering, including defining it, describing the process, and providing case studies. Money laundering is defined as disguising illegally obtained money to make it appear legitimate. The process typically involves three stages: placement, layering, and integration. Placement involves putting dirty money into the financial system. Layering involves separating the money from its source through transactions. Integration makes the money appear clean. Case studies show how professionals like lawyers and accountants can be used to launder money through techniques like shell companies and structured transactions. Estimates suggest $600 billion to $2 trillion may be laundered annually, impacting economies and banking systems.
The document discusses Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines from the Reserve Bank of India (RBI). It outlines the need to revise KYC norms due to technological advances and mobility. The RBI formulated new guidelines based on FATF recommendations to prevent money laundering and ensure banks implement appropriate controls and policies approved by their boards. The guidelines cover customer identification procedures, risk profiling, transaction monitoring, and roles and responsibilities to comply with KYC-AML standards.
This document discusses anti-money laundering regulations and obligations for solicitors and credit unions. It provides an overview of key legislation, requirements for customer due diligence, identifying beneficial owners, reporting suspicious transactions, record keeping, and training staff. It notes the penalties for non-compliance and examples of suspicious activities and red flags that could trigger reporting obligations.
This document discusses know your customer (KYC) and anti-money laundering (AML) compliance. It provides an overview of key AML laws and regulations including the Financial Action Task Force (FATF) recommendations, European Union directives, and Luxembourg's AML laws. It also discusses money laundering and predicate offenses, the definition of a business relationship, applying a risk-based approach to KYC, and the obligations to identify customers, monitor transactions, and cooperate with authorities.
This document summarizes the Prevention of Money Laundering Act of 2002 in India. It defines money laundering and outlines the key stages of money laundering. It also discusses how money laundering methods have evolved over time from bank-centered techniques to using new payment systems and non-profit organizations. The Act established obligations for banks, financial institutions, and intermediaries to maintain records and report suspicious transactions to combat money laundering. It requires reporting entities to appoint a Principal Officer and verify customer identity.
The document discusses identity verification for regulated transactions. It begins by outlining what drives the need for e-identity, noting that identity is required when people want to conduct transactions like buying, selling, or receiving goods and services online. It then examines different regulatory approaches to identity verification in several jurisdictions. Specifically, it analyzes how identity is identified and verified remotely in the EU, South Korea, Hong Kong, Singapore, and Australia. The document concludes by discussing private sectors that require identity verification, and different methods for establishing identity, including using physical documents, static electronic databases, and dynamic electronic verification through transactions.
This document provides an overview of key concepts in the United Arab Emirates' (UAE) anti-money laundering (AML) laws and regulations based on the Financial Action Task Force (FATF) standards. It summarizes definitions and requirements around predicate offenses, suspicious activity reporting, international cooperation, and the role of the Central Bank and independent Financial Intelligence Unit. Key articles of the UAE's Federal Decree Law Number (20) of 2018 on money laundering are also briefly explained.
Money Laundering and Its Fall-out - ROLE OF BANKS & FINANCIAL INSTITUTIONS I...Resurgent India
The document outlines the role of banks and financial institutions in preventing money laundering in India. It discusses guidelines from the Reserve Bank of India that require know-your-customer procedures for account openings and monitoring transactions for suspicious activity. Banks must categorize customers as low, medium, or high risk and apply appropriate due diligence and documentation requirements. They are also required to monitor large cash transactions and file reports on suspicious transactions over certain thresholds to the Financial Intelligence Unit. The document provides examples of suspicious activities and stresses the important role banks play in combating money laundering through proper policies, training, and compliance with anti-money laundering regulations.
The document discusses money laundering, including defining it, describing the process, and providing case studies. Money laundering is defined as disguising illegally obtained money to make it appear legitimate. The process typically involves three stages: placement, layering, and integration. Placement involves putting dirty money into the financial system. Layering involves separating the money from its source through transactions. Integration makes the money appear clean. Case studies show how professionals like lawyers and accountants can be used to launder money through techniques like shell companies and structured transactions. Estimates suggest $600 billion to $2 trillion may be laundered annually, impacting economies and banking systems.
The document discusses Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines from the Reserve Bank of India (RBI). It outlines the need to revise KYC norms due to technological advances and mobility. The RBI formulated new guidelines based on FATF recommendations to prevent money laundering and ensure banks implement appropriate controls and policies approved by their boards. The guidelines cover customer identification procedures, risk profiling, transaction monitoring, and roles and responsibilities to comply with KYC-AML standards.
This document discusses anti-money laundering regulations and obligations for solicitors and credit unions. It provides an overview of key legislation, requirements for customer due diligence, identifying beneficial owners, reporting suspicious transactions, record keeping, and training staff. It notes the penalties for non-compliance and examples of suspicious activities and red flags that could trigger reporting obligations.
This document discusses know your customer (KYC) and anti-money laundering (AML) compliance. It provides an overview of key AML laws and regulations including the Financial Action Task Force (FATF) recommendations, European Union directives, and Luxembourg's AML laws. It also discusses money laundering and predicate offenses, the definition of a business relationship, applying a risk-based approach to KYC, and the obligations to identify customers, monitor transactions, and cooperate with authorities.
This document summarizes the Prevention of Money Laundering Act of 2002 in India. It defines money laundering and outlines the key stages of money laundering. It also discusses how money laundering methods have evolved over time from bank-centered techniques to using new payment systems and non-profit organizations. The Act established obligations for banks, financial institutions, and intermediaries to maintain records and report suspicious transactions to combat money laundering. It requires reporting entities to appoint a Principal Officer and verify customer identity.
The document discusses identity verification for regulated transactions. It begins by outlining what drives the need for e-identity, noting that identity is required when people want to conduct transactions like buying, selling, or receiving goods and services online. It then examines different regulatory approaches to identity verification in several jurisdictions. Specifically, it analyzes how identity is identified and verified remotely in the EU, South Korea, Hong Kong, Singapore, and Australia. The document concludes by discussing private sectors that require identity verification, and different methods for establishing identity, including using physical documents, static electronic databases, and dynamic electronic verification through transactions.
This document provides an overview of key concepts in the United Arab Emirates' (UAE) anti-money laundering (AML) laws and regulations based on the Financial Action Task Force (FATF) standards. It summarizes definitions and requirements around predicate offenses, suspicious activity reporting, international cooperation, and the role of the Central Bank and independent Financial Intelligence Unit. Key articles of the UAE's Federal Decree Law Number (20) of 2018 on money laundering are also briefly explained.
Money Laundering and Its Fall-out - ROLE OF BANKS & FINANCIAL INSTITUTIONS I...Resurgent India
The document outlines the role of banks and financial institutions in preventing money laundering in India. It discusses guidelines from the Reserve Bank of India that require know-your-customer procedures for account openings and monitoring transactions for suspicious activity. Banks must categorize customers as low, medium, or high risk and apply appropriate due diligence and documentation requirements. They are also required to monitor large cash transactions and file reports on suspicious transactions over certain thresholds to the Financial Intelligence Unit. The document provides examples of suspicious activities and stresses the important role banks play in combating money laundering through proper policies, training, and compliance with anti-money laundering regulations.
This document provides an overview of anti-money laundering (AML) practices. It discusses the stages of money laundering, including placement, layering, and integration. It covers key AML concepts like know-your-customer procedures, suspicious activity reporting, and the role of regulatory bodies like the Financial Action Task Force in establishing international AML standards. The document is intended to help participants understand AML definitions, pillars, risks, and compliance responsibilities.
This document discusses Know Your Customer (KYC) procedures that banks must follow to prevent money laundering and related financial crimes. It outlines the key risks to banks, definitions of customers and transactions that require monitoring, KYC documentation standards, periodic review cycles based on customer risk, reporting requirements, record keeping policies, relaxed KYC procedures for low-income customers, and the need for staff training and customer education on KYC-related issues.
The document provides an overview of AML/KYC regulations in the EU, including details on the 4th EU AML directive. It discusses key requirements such as enhanced due diligence for politically exposed persons, information on beneficial owners, and data protection. It also includes a case study on customer due diligence and beneficial ownership, and summaries of regulatory fines against financial institutions for AML failures.
Prevention of money laundering class room notes for ca icma pavan kumar
This document discusses money laundering techniques and the Prevention of Money Laundering Act (PMLA) of 2002 in India. It defines money laundering and outlines the key stages in the money laundering process: placement, layering, and integration. It describes common placement methods like structuring deposits and using shell companies. It also discusses the obligations of banks and financial institutions under the PMLA to identify and report suspicious transactions and maintain records. Overall, the document provides an overview of how illegally obtained money is laundered and cleaned to appear legitimate, as well as India's laws aimed at preventing money laundering.
This document provides an overview of anti-money laundering practices and suspicious transactions. It discusses the key stages of money laundering: placement, layering, and integration. It also outlines the elements of an effective AML program, including board approval, training, internal controls, and independent audits. Several typologies of money laundering are described, such as the use of shell companies and cash couriers. Guidelines for identifying and reporting suspicious transactions and clients are provided. Specific scenarios involving suspicious activities like structuring are reviewed.
Money laundering is the process of making illegally obtained money appear legal. This document discusses how criminals first place illegal funds into the financial system through various techniques like structuring deposits to avoid reporting requirements, using alternative remittance systems, or purchasing assets or insurance policies. It then explains how launderers further layer the funds by moving them through many transactions to obscure their source and make the money harder to trace back to criminal activity. Kenya's new anti-money laundering law aims to regulate these processes but questions remain over successful implementation.
The document discusses customer due diligence (CDD) and know your customer (KYC) procedures for financial institutions. It outlines the key elements of a CDD program, including identifying customers, monitoring transactions, and performing enhanced due diligence for high-risk clients. Financial institutions must follow the FATF recommendations to avoid legal and reputational risks from money laundering. Proper CDD involves identifying both natural and legal persons as well as their beneficial owners.
This document discusses Know Your Customer (KYC) procedures for mobile money providers. KYC involves collecting customer identity information and verifying it to help prevent money laundering. International standards set specific KYC obligations, but these can exclude many poor customers who lack documents like IDs. However, alternatives like transaction limits and account monitoring may allow for reduced KYC while still mitigating risks. The World Bank has found this approach works, and an interview with a mobile money provider in the Philippines provides a real-world example. Tools are available to help assess money laundering risks and determine appropriate KYC levels.
KYC, or Know Your Customer, is a process where banks obtain details about a customer's identity and address. This helps ensure that bank services are not being misused, and enables banks to understand customer transactions and manage risks like money laundering and terrorism financing. As part of KYC, banks must periodically update customer details. KYC helps prevent identity theft, financial fraud, money laundering and terrorist financing. Banks must perform KYC when opening accounts, issuing loans or credit cards, and in other instances to obtain additional customer information.
The document outlines guidelines for anti-money laundering programs for insurers in India. It defines money laundering and its three stages: placement, layering, and integration. It discusses Know Your Customer (KYC) policies, including documentation requirements. It also covers risk profiling customers, suspicious transactions, reporting requirements, and penalties for money laundering. The overall summary is that the document provides an overview of India's regulations for insurers to establish anti-money laundering programs and procedures to combat financial crimes.
With a zero tolerance level in Money Laundering and associated large regulatory penalties for non compliance, Banks and other Financial Institutes are spending immense time, effort and money to achieve compliance. Needless to say, it is still not enough. The Black Swan can enter into any Financial Institute’s Branch on any given day and sting the Bank by surprise.
The implementation of a formal and a structured AML Mitigation and oversight system and processes that effectively identify, assess, and manage such risk within acceptable levels is a challenge. Therefore, awareness about the menace of money laundering and thorough understanding of the antimony laundering process and its current trends at all levels of staff of a bank/FI are ever growing necessities.
Awaiting your valuable nominations/enquiries to make the programs mutually beneficial and successful. Please email manoj.jain@riskpro.in or contact at 98337 67114 for more details.
Program Highlights
Let the experts guide you on the best practices in Anti Money Laundering
Perspective from RBI, FIU- IND, Income Tax and more
Global regulations around AML/KYC
Indian regulations and latest reforms
How to avoid any kind of surprises
Linking AML compliance to Reputation Risk, Social Media Risk
Dodd Frank Act, US Patriot Act
What it takes to say “NO” to profitable and abundant business
Speakers and Panelist
Guest speakers from Regulatory Authorities
Risk Management and Banking Experts
Manoj Jain, Director and Co Founder, Riskpro India
Hemant Seigell, Director, Riskpro India
R Muralidharan, ex DGM - Risk Management, Bank of Maharashtra
Hemlatha Mohan, ex Country Head ORM, ING Vysya Bank
Prasanna Rath, ex Head of Risk, TAIB Bank, Bahrain
Prominent AML experts as panelist
This document outlines KYC and AML guidelines issued by the Reserve Bank of India and NABARD. It defines key terms and outlines requirements for banks related to customer identification procedures, monitoring transactions, and establishing an overall KYC and AML policy framework. This includes guidance on customer due diligence, introduction of new technologies, periodic KYC updates, and other measures to prevent money laundering and terrorist financing. Simplified norms are also provided for self-help groups and walk-in customers.
Presentation given for Crowe Horwath Auditor's training session on 26/03/2016.
AML regulations are applicable to professional service providers also. See the presentation for more information
Money laundering involves disguising illegally obtained money to make it appear legitimate. Key aspects of preventing money laundering include complying with know-your-customer (KYC) norms, identifying suspicious transactions, and reporting cash and suspicious transactions to authorities on time. Banks must implement anti-money laundering measures like monitoring high-risk accounts, appointing compliance officers, and training staff to detect and deter money laundering activities.
The document discusses money laundering, including its definition, process, and risks. It defines money laundering as the process of converting illegal funds into legitimate funds and assets. The money laundering cycle involves placement, layering, and integration of funds to obscure their criminal origin. Risks to banks from money laundering include reputational, legal, operational, and concentration risks. Know-your-customer (KYC) norms and monitoring of suspicious transactions are important measures to deter money laundering.
The document discusses the basics of anti-money laundering (AML) and know-your-customer (KYC) practices. It defines money laundering and the typical process involving placement, layering and integration of illegally obtained funds. It outlines AML and KYC policies, procedures, controls, and compliance measures financial institutions must implement including customer due diligence, transaction monitoring, and reporting of suspicious transactions. The role of cash in money laundering and obligations of bank officers to exercise vigilance and maintain their institution's reputation are also summarized.
The document discusses money laundering and the obligations of reporting institutions under Malaysia's Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA). It defines money laundering as disguising illegally obtained cash or property to make it appear legitimate. It outlines risks like reputational damage for institutions that don't comply with AMLATFA. Key obligations include conducting customer due diligence, identifying suspicious transactions, and reporting them to the authorities. Failure to comply can result in fines or imprisonment.
The 4th EU Anti-Money Laundering Directive and YOU!CDDS
The 4th Anti-Money Laundering Directive refines rules on customer due diligence to require a risk-based approach. It establishes national central registers of beneficial owners of companies. It expands politically exposed persons to include domestic PEPs and modifies time periods. It adds tax crimes as predicate offenses and allows reliance on third parties for customer due diligence while retaining ultimate responsibility.
This document summarizes current trends on KYC regulations:
1. It discusses risk-based and tiered customer identification systems that categorize customers as low, normal, or high risk and require different levels of due diligence.
2. International wire transfers and ensuring KYC is properly performed through documentation are also covered.
3. Enforcement actions taken by regulators are mentioned as well to ensure compliance with KYC regulations.
This whitepaper looks at the distinctions across the United States, the United Kingdom and Hong Kong, focusing on four areas: regulatory examination and enforcement, correspondent banking, information sharing, and AML technology.
This document discusses AML-CTF issues and best practices for credit unions. It begins by providing a real-world example of money laundering through businesses. It emphasizes that the board is responsible for conducting risk assessments to identify high, medium, and low risks, and for ensuring suitable controls are designed and implemented. It also discusses the roles of the AML officer and MLRO, issues around member identification, suspicious transactions, loan applications, training requirements, and good practices like splitting AML/MLRO roles and having clear procedures applied by all staff.
This document provides an overview of anti-money laundering (AML) practices. It discusses the stages of money laundering, including placement, layering, and integration. It covers key AML concepts like know-your-customer procedures, suspicious activity reporting, and the role of regulatory bodies like the Financial Action Task Force in establishing international AML standards. The document is intended to help participants understand AML definitions, pillars, risks, and compliance responsibilities.
This document discusses Know Your Customer (KYC) procedures that banks must follow to prevent money laundering and related financial crimes. It outlines the key risks to banks, definitions of customers and transactions that require monitoring, KYC documentation standards, periodic review cycles based on customer risk, reporting requirements, record keeping policies, relaxed KYC procedures for low-income customers, and the need for staff training and customer education on KYC-related issues.
The document provides an overview of AML/KYC regulations in the EU, including details on the 4th EU AML directive. It discusses key requirements such as enhanced due diligence for politically exposed persons, information on beneficial owners, and data protection. It also includes a case study on customer due diligence and beneficial ownership, and summaries of regulatory fines against financial institutions for AML failures.
Prevention of money laundering class room notes for ca icma pavan kumar
This document discusses money laundering techniques and the Prevention of Money Laundering Act (PMLA) of 2002 in India. It defines money laundering and outlines the key stages in the money laundering process: placement, layering, and integration. It describes common placement methods like structuring deposits and using shell companies. It also discusses the obligations of banks and financial institutions under the PMLA to identify and report suspicious transactions and maintain records. Overall, the document provides an overview of how illegally obtained money is laundered and cleaned to appear legitimate, as well as India's laws aimed at preventing money laundering.
This document provides an overview of anti-money laundering practices and suspicious transactions. It discusses the key stages of money laundering: placement, layering, and integration. It also outlines the elements of an effective AML program, including board approval, training, internal controls, and independent audits. Several typologies of money laundering are described, such as the use of shell companies and cash couriers. Guidelines for identifying and reporting suspicious transactions and clients are provided. Specific scenarios involving suspicious activities like structuring are reviewed.
Money laundering is the process of making illegally obtained money appear legal. This document discusses how criminals first place illegal funds into the financial system through various techniques like structuring deposits to avoid reporting requirements, using alternative remittance systems, or purchasing assets or insurance policies. It then explains how launderers further layer the funds by moving them through many transactions to obscure their source and make the money harder to trace back to criminal activity. Kenya's new anti-money laundering law aims to regulate these processes but questions remain over successful implementation.
The document discusses customer due diligence (CDD) and know your customer (KYC) procedures for financial institutions. It outlines the key elements of a CDD program, including identifying customers, monitoring transactions, and performing enhanced due diligence for high-risk clients. Financial institutions must follow the FATF recommendations to avoid legal and reputational risks from money laundering. Proper CDD involves identifying both natural and legal persons as well as their beneficial owners.
This document discusses Know Your Customer (KYC) procedures for mobile money providers. KYC involves collecting customer identity information and verifying it to help prevent money laundering. International standards set specific KYC obligations, but these can exclude many poor customers who lack documents like IDs. However, alternatives like transaction limits and account monitoring may allow for reduced KYC while still mitigating risks. The World Bank has found this approach works, and an interview with a mobile money provider in the Philippines provides a real-world example. Tools are available to help assess money laundering risks and determine appropriate KYC levels.
KYC, or Know Your Customer, is a process where banks obtain details about a customer's identity and address. This helps ensure that bank services are not being misused, and enables banks to understand customer transactions and manage risks like money laundering and terrorism financing. As part of KYC, banks must periodically update customer details. KYC helps prevent identity theft, financial fraud, money laundering and terrorist financing. Banks must perform KYC when opening accounts, issuing loans or credit cards, and in other instances to obtain additional customer information.
The document outlines guidelines for anti-money laundering programs for insurers in India. It defines money laundering and its three stages: placement, layering, and integration. It discusses Know Your Customer (KYC) policies, including documentation requirements. It also covers risk profiling customers, suspicious transactions, reporting requirements, and penalties for money laundering. The overall summary is that the document provides an overview of India's regulations for insurers to establish anti-money laundering programs and procedures to combat financial crimes.
With a zero tolerance level in Money Laundering and associated large regulatory penalties for non compliance, Banks and other Financial Institutes are spending immense time, effort and money to achieve compliance. Needless to say, it is still not enough. The Black Swan can enter into any Financial Institute’s Branch on any given day and sting the Bank by surprise.
The implementation of a formal and a structured AML Mitigation and oversight system and processes that effectively identify, assess, and manage such risk within acceptable levels is a challenge. Therefore, awareness about the menace of money laundering and thorough understanding of the antimony laundering process and its current trends at all levels of staff of a bank/FI are ever growing necessities.
Awaiting your valuable nominations/enquiries to make the programs mutually beneficial and successful. Please email manoj.jain@riskpro.in or contact at 98337 67114 for more details.
Program Highlights
Let the experts guide you on the best practices in Anti Money Laundering
Perspective from RBI, FIU- IND, Income Tax and more
Global regulations around AML/KYC
Indian regulations and latest reforms
How to avoid any kind of surprises
Linking AML compliance to Reputation Risk, Social Media Risk
Dodd Frank Act, US Patriot Act
What it takes to say “NO” to profitable and abundant business
Speakers and Panelist
Guest speakers from Regulatory Authorities
Risk Management and Banking Experts
Manoj Jain, Director and Co Founder, Riskpro India
Hemant Seigell, Director, Riskpro India
R Muralidharan, ex DGM - Risk Management, Bank of Maharashtra
Hemlatha Mohan, ex Country Head ORM, ING Vysya Bank
Prasanna Rath, ex Head of Risk, TAIB Bank, Bahrain
Prominent AML experts as panelist
This document outlines KYC and AML guidelines issued by the Reserve Bank of India and NABARD. It defines key terms and outlines requirements for banks related to customer identification procedures, monitoring transactions, and establishing an overall KYC and AML policy framework. This includes guidance on customer due diligence, introduction of new technologies, periodic KYC updates, and other measures to prevent money laundering and terrorist financing. Simplified norms are also provided for self-help groups and walk-in customers.
Presentation given for Crowe Horwath Auditor's training session on 26/03/2016.
AML regulations are applicable to professional service providers also. See the presentation for more information
Money laundering involves disguising illegally obtained money to make it appear legitimate. Key aspects of preventing money laundering include complying with know-your-customer (KYC) norms, identifying suspicious transactions, and reporting cash and suspicious transactions to authorities on time. Banks must implement anti-money laundering measures like monitoring high-risk accounts, appointing compliance officers, and training staff to detect and deter money laundering activities.
The document discusses money laundering, including its definition, process, and risks. It defines money laundering as the process of converting illegal funds into legitimate funds and assets. The money laundering cycle involves placement, layering, and integration of funds to obscure their criminal origin. Risks to banks from money laundering include reputational, legal, operational, and concentration risks. Know-your-customer (KYC) norms and monitoring of suspicious transactions are important measures to deter money laundering.
The document discusses the basics of anti-money laundering (AML) and know-your-customer (KYC) practices. It defines money laundering and the typical process involving placement, layering and integration of illegally obtained funds. It outlines AML and KYC policies, procedures, controls, and compliance measures financial institutions must implement including customer due diligence, transaction monitoring, and reporting of suspicious transactions. The role of cash in money laundering and obligations of bank officers to exercise vigilance and maintain their institution's reputation are also summarized.
The document discusses money laundering and the obligations of reporting institutions under Malaysia's Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA). It defines money laundering as disguising illegally obtained cash or property to make it appear legitimate. It outlines risks like reputational damage for institutions that don't comply with AMLATFA. Key obligations include conducting customer due diligence, identifying suspicious transactions, and reporting them to the authorities. Failure to comply can result in fines or imprisonment.
The 4th EU Anti-Money Laundering Directive and YOU!CDDS
The 4th Anti-Money Laundering Directive refines rules on customer due diligence to require a risk-based approach. It establishes national central registers of beneficial owners of companies. It expands politically exposed persons to include domestic PEPs and modifies time periods. It adds tax crimes as predicate offenses and allows reliance on third parties for customer due diligence while retaining ultimate responsibility.
This document summarizes current trends on KYC regulations:
1. It discusses risk-based and tiered customer identification systems that categorize customers as low, normal, or high risk and require different levels of due diligence.
2. International wire transfers and ensuring KYC is properly performed through documentation are also covered.
3. Enforcement actions taken by regulators are mentioned as well to ensure compliance with KYC regulations.
This whitepaper looks at the distinctions across the United States, the United Kingdom and Hong Kong, focusing on four areas: regulatory examination and enforcement, correspondent banking, information sharing, and AML technology.
This document discusses AML-CTF issues and best practices for credit unions. It begins by providing a real-world example of money laundering through businesses. It emphasizes that the board is responsible for conducting risk assessments to identify high, medium, and low risks, and for ensuring suitable controls are designed and implemented. It also discusses the roles of the AML officer and MLRO, issues around member identification, suspicious transactions, loan applications, training requirements, and good practices like splitting AML/MLRO roles and having clear procedures applied by all staff.
Vskills certification in KYC (Know Your Customer) and Anti Money Laundering Operation, is one of the first certifications in this area of banking sector. A Vskills Certified AML/KYC Officer finds employment in banking and banking ancillary firms, security and audit firms, and other small and medium enterprises.
http://www.vskills.in/certification/Certified-AML-KYC-Compliance-Officer
This document discusses developing a compliance capability for an organization. It outlines principles for taking an end-to-end view of business processes to ensure compliance. Ownership and accountability for compliance must be clear from leadership down. Compliance processes should be integrated into business functions from the start. Automating compliance functions and integrating compliance into transaction lifecycles can help comprehensively control processes. Self-assessments can identify compliance capabilities and gaps to help define a target compliance state.
Bovill - the UK financial services regulatory consultancy - runs regular briefings. These are the slides from the February briefing on anti-money laundering. For more information visit http://www.bovill.com/FinancialCrime.aspx.
Information on the event is below:
Taking a company-wide approach to money laundering
“The FCA has made it very clear that responsibility for the overall culture of firms sits at the top. We need leaders and senior managers within the industry to set the tone for how their staff behave.”
Tracey McDermott, Director of Enforcement and Financial Crime, FCA
The regulator has recently reiterated their intention to carry out further thematic and enforcement work in financial crime. However, many firms still have a fragmented approach to managing the risks of money laundering.
The responsibility for preventing financial crime is shared across the firm from the back office to the boardroom. Firms need to take a company-wide approach to tackling money laundering to ensure they are complying with regulation and managing risks effectively.
Bovill’s briefing looked at Anti-Money Laundering (AML), covering:
• Governance arrangements: as the foundation for effective communication and issue resolution
• Risk management: the difficulties of negotiating the right level of due diligence for higher risk customers and what tools can be used to help with this process
• Systems and controls: ensuring that these are fit for regulatory purpose and are appropriately maintained within your firm.
This document proposes an anti-money laundering (AML) framework with the following components:
1. The current AML capability has inconsistencies and gaps that need to be addressed to improve risk management, compliance, and effectiveness.
2. The target state aims to establish consistent AML processes, full business engagement, defined risk categorization, ongoing enhancement, and complex scenario coverage.
3. An investigative methodology is outlined involving determining needs, collecting data, examining results, and agreeing on action plans to address triggers like suspicious activity cases.
Presentation by Bachir El Nakib at The International Conference on:
Combating Money Laundering and Terrorist Financing"(AML/CFT)
27th – 28th of April 2011, Coral Beach Hotel, Beirut – Lebanon
This document appears to be a template for the appendices section of a project report submitted by a student. It includes sample cover page, title page, certificate, acknowledgements, executive summary, table of contents, list of tables, and sections for the objective and scope, limitations, company profile, research methodology, data tabulation, analysis, observations and findings, conclusions, recommendations, bibliography, and appendices. Each appendix provides headings and formatting for the different components typically included in a student project report.
The document discusses money laundering prevention. It outlines the objectives of increasing awareness of anti-money laundering responsibilities and regulations. Non-compliance can result in penalties like imprisonment, fines, license revocation and more. Key aspects of money laundering prevention covered include know-your-customer procedures, suspicious transaction reporting, and the importance of monitoring transactions for consistency with customer profiles.
This document discusses various ethical issues that can arise in the finance sector. It covers frauds like credit card and check fraud, securities fraud, and computer fraud. It also discusses types of bank frauds such as unauthorized credit extensions and deposit account fraud. Regarding the insurance sector, it identifies three types of fraud and notes fraud can occur during the proposal, contract, or claims stages. It also provides measures to combat fraud in banking like anti-money laundering acts and for insurance like regulation, transparency, and legislation. The document closes by discussing creative accounting, abusive tax shelters, insider trading, and the role of ethics codes.
Financial ethical issues presentation by Ihsanullah mansoor from Afghanistan,currently enrolled student of the University of Haripur ,Haripur KPK,Pakistan
This document summarizes key aspects of the US Foreign Corrupt Practices Act (FCPA). It describes the FCPA's anti-bribery and accounting provisions, what constitutes a foreign official, exceptions for facilitating payments and promotional expenditures, due diligence requirements, and penalties for noncompliance. It also provides examples of FCPA enforcement actions and analyzes several hypothetical situations involving third parties, gifts and entertainment, and mergers and acquisitions for potential FCPA issues.
This document provides an overview of forensic auditing. It defines a forensic audit as an examination of financial information to be used as evidence in court. The objectives of a forensic audit are to facilitate settlements, avoid fraud, restore confidence, and establish corporate governance policies. Forensic audit services typically include financial statement reviews, computer forensics, and calculating economic losses. The document outlines the methodology, procedures, fraudster profiles, fraud triangle, pressure/opportunity/rationalization factors, and types of fraud that may be investigated in a forensic audit.
A UBO is an individual who ultimately owns or controls 25% or more
of an entity (whether directly as a shareholder or indirectly via control
of companies) or other entities or structures that control the entity. In
short, it is the ultimate beneficiary regardless of the chain of control.
Increasing Intensity to achieve collectionHannah Rain
This document provides guidance on various collection strategies and techniques for collecting on overdue debts. It discusses maintaining payment plans, aggressive communication with debtors, obtaining postdated checks and electronic payments, enforcing liens and bonds, reporting debts to credit bureaus, locating hard-to-find debtors using public records and internet resources, bringing in outside collection professionals, and dealing with issues like bad checks, bankruptcies, and countersuits. The document emphasizes the importance of organization, documentation, compliance with laws, and both professional and ethical treatment of debtors throughout the collection process.
This document provides an introduction to fraud, including definitions, types of fraud, who can commit fraud, potential triggers of fraud, reasons for fraud, and impacts of fraud. It defines fraud as any dishonest act or omission intended to gain advantage. Common types of fraud include cheating, forgery, misappropriation, and fraudulent transactions. Employees, customers, and outsiders can all perpetrate fraud. Triggers may include lifestyle changes or high-risk transactions. Fraud is often committed due to financial problems, knowledge of weaknesses, and rationalization. Impacts include financial, regulatory, and reputational risks for institutions, as well as punishments for individuals.
This document discusses procurement fraud, including false invoices. It provides three case studies of false invoice schemes, including one that involved creating fake vendors and invoices to obtain over $2 million. It also demonstrates how easily invoices can be falsified using basic software. The document outlines warning signs for false invoices and recommends controls like segregation of duties, vendor verification, and data analytics to help prevent and detect procurement fraud.
Forensic auditing investigates financial reporting misconduct by applying accounting and investigative skills. A forensic audit follows similar steps as a regular audit but may include court appearances. Auditors plan investigations to identify fraud, collect legal evidence, write reports, and present findings in court if needed. Forensic audits are used to investigate corruption, conflicts of interest, bribery, and other legal and financial issues. Forensic accountants have careers investigating fraud, estimating losses, resolving disputes, and other specialized accounting work.
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2. Money Laundering
Money laundering is where criminals attempt to
hide the true origins of the proceeds of their
criminal activities by making them appear to
come from a legitimate source. These proceeds
are often referred to as 'dirty money'.
3. Money Laundering Process
There are three main stages of the money
laundering process:
• Placement
• Layering
• Integration
4. Placement
• Placement occurs when a criminal first 'places' the
proceeds of their crime into the legitimate system.
• For example, this might be when a criminal deposits
stolen money in a bank account.
5. Layering
• Layering consists of a series of transactions
designed to distance the money from its original
source and disguise its illegitimate origin.
• This makes the illegitimate source of the money
more difficult for the authorities to trace.
6. Example : a 4 step transaction
• Example : prudential’s probound
• A criminal deposits stolen cash in a bank account
• The criminal draws a cheque on this bank account
to purchase a Prubond
• The criminal surrenders the Prubond in a few days
and receives a cheque
• The criminal pays the Prudential cheque into a
different bank account
7. Integration
• Integration occurs when criminals, having been
through the previous parts of the process, use their
illegally obtained money as if it was legitimate. This
means the illegitimate money ends up being
integrated back into the legitimate economy.
• For example, a criminal could use the proceeds
from the Prubond surrender cheque as a deposit to
purchase a property.
8. FSA (UK)
• the FSA's objective in relation to money laundering is to help
reduce financial crime
• money laundering compliance for the financial services sector
is regulated by the FSA. The key pieces of legislation are the
Money Laundering Regulations 2003 and the Proceeds of
Crime Act 2002
• your own activities are also covered under the anti-money
laundering regulations
• the penalties for non-compliance are severe, including
unlimited fines and sentences of up to 14 years imprisonment
9. • All employees are legally required to report where
they know, suspect or have "reasonable grounds to
suspect" that a customer is or may be laundering
the proceeds of any criminal conduct.
10. Suspicious activity reporting
• Suspicious Activity Reports made by employees
within financial services firms provide intelligence to
law enforcement agencies that genuinely makes a
difference. These reports have led to the successful
prosecution of criminals and the disruption of
terrorist activity.
• Therefore, making a Suspicious Activity Report
is not a box ticking exercise.
11. Acting on suspicion or knowledge
• You are legally required to make a Suspicious
Activity Report when you are suspicious about a
transaction, or when you know that a transaction
relates to money from a criminal source.
There are two things:
• Suspicion
• Knowledge
12. Suspicion
A customer asks to surrender a large investment
made only a few weeks earlier. He seems to be
financially astute but he tells you that he only
invested the money for a short time pending
completion of a property transaction and he now
needs the money. You are suspicious because the
customer has lost money on the surrender and in
your view, the reason for the quick surrender is not
a plausible one.
13. Knowledge
For example, If you were processing a policy
application for a significant sum of money and you
knew that customer's only source of money was
from drug dealing, you would be legally required to
make a report.
14. Reasonable Grounds to Suspect
• You are also legally required to make a Suspicious
Activity Report in a situation where there are
"reasonable grounds to suspect" that money
laundering is occurring.
• This legal requirement has been introduced to make
it easier to prosecute people who were not
suspicious about a transaction when they should
have been.
15. What to look for
• high value cancellations where it would appear that
the customer had no intention of taking up the
investment or assurance product
• high value withdrawals (individual transactions or a
number of withdrawals over a short period of time)
starting soon after the investment, from a long term
investment contract
• unusual sources or destinations of funds (eg other
country, EU, Channel Islands and Isle of Man)
16. What to look for… contd.
• a customer notifying us of a change of address followed
shortly afterwards by the encashment of a large
investment where payment is to be made to a bank
outside of the country
• requests for business where the customer is more
interested in the surrender/cancellation arrangements
than the investment return (especially where there is a
loss)
• unusual requests eg dividing proceeds at maturity or
surrender into several smaller amounts to a number of
different people (possibly outside of the country), or a
request to pay initial contributions in cash
17. What to look for.. Contd.
• resistance to reasonable requests for evidence of ID where
the customer has or wishes to have significant business
with the company (but not where a long term customer with
a low value policy objects to a request for further
verification because they do not consider it necessary
unless you have other reasons to be suspicious)
• requests for business from an unknown intermediary
outside of the country.
18. What to look for
• where you would not expect the customer to be able
to afford the investment in question (perhaps
because of where he or she lives)
• where a corporate pension applicant does not
appear to be trading and does not appear to have
any 'real' employees
19. When suspicions are around prior
to the completion of transaction
• Where your suspicions are aroused prior to the
completion of a transaction (and regardless of whether
you have yet completed a suspicious activity report) eg:
• a large investment has been received and you do not
know whether or not to accept it
• you are suspicious about an imminent customer payment
Contact the MLRO or one of his team for advice before
completing the transaction
20. Tipping off
• Once you have made a Suspicious Activity Report,
you cannot be prosecuted for failing to report the
suspicious transaction or for assisting a money
launderer. However, you do need to remember that
once a suspicion has been reported you should
ensure that you do not alert the customer to your
suspicions during any subsequent dealings
(Tipping-Off).
21. • If I have concerns about a customer's transaction, can I
ask them any questions?
• Yes, this situation does not prevent you from asking the
customer the normal commercial questions to help you to
determine whether or not you should be suspicious. For
example, if a customer surrenders a high value bond a
short period of time after the original investment, you could
ask the customer why, as they may have other options
rather than surrendering. If you have any doubts about
what you can say, you should contact me or one or my
team.
22. • If I make a suspicious activity report against a
customer, will they be able to claim against me in
respect of a breach of customer confidentiality?
• No, the money laundering legislation protects you from
any such claims when reporting suspicions and
knowledge, provided that you have made the report in
good faith.
23. High Risk Countries
• Countries who do not establish strong anti-money
laundering regimes are considered to be particularly
high risk in terms of potential for money laundering.
These countries are described as Non-Co-operative
Countries and Territories or NCCTs.
• Guidance must be sought from the MLRO or one of
his team before completing a transaction for
individuals, intermediaries, companies and other
entities (including banks) in these
countries/territories.
25. In the context of Suspicious Activity Reports, management
responsibilities consist of:
• ensuring employees are adequately trained
• keeping records to evidence that training
• advising employees where they have sought guidance on
transactions
• where appropriate, adding comments to the report form
• where a report has been made, ensuring that the customer
is not 'tipped off'
27. KYC
• Many people mistakenly believe that KYC is just
about client identity - it is not!
• The identity of a customer is, of course, very
important and it does form a major part of KYC, but
KYC extends beyond this and can include additional
information.
28. KYC Process
Here are some of the key aspects of the verification of
identity process and the wider KYC process:
• Verification of identity -
• Can you positively identify who you are dealing with?
• can you identify the person actually making the
payment (if that person is someone else)?
• are they actually who they claim to be?
• do they live, or conduct business, at the address they
have given?
29. KYC
• do you understand why and how a customer wants to
transact a particular piece of business?
• what other business does the customer have?
• is the proposed business consistent with what we would
expect?
Verification of identity and the wider KYC helps us to
understand our customers' needs and potentially recognise
suspicious behaviours.
30. • Some of the verification of identity process and the
wider KYC is undertaken at the outset by an
intermediary (such as a financial adviser or one of
our key business partners). However, it is also up to
us to 'know our customer' throughout the term of the
policy and/or the duration of that customer's
business relationship with us.
31. • Personal customers are usually people who:
• use the services of a financial adviser
• approach us directly, for example, when they:
– apply for a stakeholder pension over the internet
– respond to a marketing campaign
– apply for other business or top-up an existing product
32. To verify the identity of personal customers, we need
to verify:
• the customer's name
• the customer's address
33. Corporate Customers
• Corporate customers can come to us directly. For example:
• Limited Companies
• PLCs
• Partnerships (groups of individuals running a business)
• Sole traders (single individuals)
• regulated financial institutions
• Government Organisations eg Local authorities, government
departments, etc
• Charities
34. • Due to their sometimes complex organisational
structures, and the potential difficulties of finding out
who really owns and controls them, corporate firms
can be ideal vehicles for money laundering.
• The type of information and documentary evidence
required to establish corporate identity varies
depending upon the type of organisation and the
nature of the product or service required.
35. • In addition, there are other circumstances where we
have to verify people other than the client, for
instance, some third parties making payments into
our customers' policies, trustees or a person acting
for our customer under a power of attorney.
• If this is the case we should try to establish and
document the reason behind the creation of the
power of attorney or trust.
36. Management Responsibilities
• Although the MLRO is an 'Approved Person' and
assumes personal responsibility for anti-money
laundering practices and procedures, all people in
line management roles play an important part in the
fight against financial crime.
• Managers, at all levels, are in a position to influence
how seriously employees treat money laundering
issues and can make a difference in helping to
prevent products and services from being used for
money laundering.
37. In the context of KYC, management responsibilities consist
of:
• ensuring employees are adequately trained
• keeping records as evidence that training has been given
• keeping records to evidence that customer identity
verification has taken place
• ensuring that any suspicious activity is reported to the
MLRO
39. Customer Records
• a certified copy of documents used to verify identity (the
copy can be held in paper or electronic form) or
• a record of where a copy of the evidence may be
obtained (eg document source reference numbers on
Intermediary Introduction Certificates (IIC's)
• transaction records, ie details of all types of payments
in/out including those made by third parties
• All of these records (with the exception of transaction
records) must be kept for a period of at least 5 years after
the policy has terminated, matured or been surrendered.
Transaction records must be retained for at least 5 years
from the date of the transaction.
40. Internal records
• staff suspicious activity reports, National Criminal
Intelligence Service (NCIS) disclosures and transaction
monitoring reports
• compliance monitoring reports
• employee training records including: dates of training,
training content, attendees, test results, etc
• These records must all be kept for a period of 5 years.
Where it is known that a law enforcement investigation is
ongoing relating to a NCIS disclosure, case records should
be held beyond the 5 years until the MLRO approves their
destruction.
41. Management Responsibilities
Managers must ensure that their people keep records
of:
• customer identity verification
• policy transactions
• their anti-money laundering training
42. What is Fraud?
Combating fraud is the responsibility of all of us.
You should be vigilant and report any suspicion of fraud. All types of fraud
need to be tackled, both internal and external. Here is a list of areas that
constitute fraud:
• improper withdrawal of funds / making a false claim
• cheque theft / manipulation
• abuse of position for personal or financial gain
• theft of money and all assets, tangible or intangible, belonging to the
company or another employee
• falsification / compromise of information or data for personal or financial gain
• corrupt payments, gifts, services or benefits from external bodies
• forgery resulting in personal or financial gain
• abuse of internal procedures / processes / equipment for personal or financial
gain
43. • Fraud can be summarised as 'any deception or
dishonesty by which a person or organisation
gains, or intends to gain, an improper advantage
over another'.