AML & CFT: Implementing a Risk-Based Framework

Transcription

1 Since 1999, Central Banking Publications has organised annual residential training courses/seminars which have been attended by more than 4,500 central bankers and supervisors from over 140 countries. AML & CFT: Implementing a Risk-Based Framework 6-9 May 2014, Cumberland Lodge, Windsor, UK Course Chairman Richard Pratt International Consultant in Financial Services Regulation Series Advisor Charles Goodhart Professor Emeritus London School of Economics Financial Markets Group

2 Dear delegate, We admit that previous assessments have focused more on technical compliance with FATF Standards, which was essential if an Anti-Money Laundering/ Counter Terrorist Financing (AML/CFT) regime is to have a solid foundation. Now we move to focus much more on effectiveness does the system work? Bjørn S. Aamo, former President, Financial Action Task Force (FATF), March 2013 In spring 2013 the FATF announced that, in addition to technical compliance with their recently updated recommendations, they will also be monitoring the effectiveness of each jurisdiction s AML & CFT framework. This new assessment methodology will pose new challenges for central banks and national regulators. Further to this, the FATF have released new guidance on the methodology for carrying out National Risk Assessments which form the basis of the risk-based approach for regulators and financial institutions alike. The FATF continue to regularly publish new typologies which focus on particular threats and vulnerabilities, highlighting risks that authorities must be increasingly aware of. Central banks and national regulators therefore face the task of implementing changes to their policies based on most recent guidelines and demonstrating compliance with these guidelines to international bodies. This seminar has been designed to equip delegates to meet the challenges faced by central bankers and regulators in combatting money laundering and terrorist financing; from identifying and combating the risks faced in individual jurisdictions to working with national and international institutions to achieve the best results. We are delighted to welcome back Richard Pratt, a former Director General of the Jersey Financial Services Commission, as chairman for the course. Joining him is an expert roster speakers including: John Aspden, CEO, Financial Supervision Commission, Isle of Man Badr el Banna, Criminal Justice Officer, Corruption and Economic Crime Branch, United Nations Office on Drugs and Crime Jean-Pierre Michau, Adviser to the Governor, Banque de France Richard Chalmers, Adviser, International, at the UK s Financial Conduct Authority Each session offers participating supervisors and central bankers an opportunity to benchmark their work against international practice and to exchange views with their peers in an informal setting. Key sessions include: The new FATF National Risk Assessment Methodology Taking a risk-based approach to countering the financing of terrorism Demonstrating compliance and effectiveness Identifying threats in payment systems and wire transfers This format, as more than 4,500 central bankers and regulators can attest, encourages delegates to quiz panellists, raise issues and discuss solutions to the specific challenges they face. For more information about the course please take a few moments to look through the contents of the course which are detailed in the pages which follow. We look forward to welcoming you to Windsor on 6 May. Yours sincerely, Robert Pringle Chairman Central Banking Publications The seminar gave me an excellent opportunity to interact with central banking staff of other functions and exchange experiences with them A central bank delegate

3 AML & CFT: Implementing a Risk-Based Framework Tuesday 6 May The Fundementals of an AML/CFT Regime The cornerstones of an AML & CFT regime Richard Pratt, International Consultant in Financial Services Regulation This session will introduce the course and invite delegates to consider the main challenges their organisations face, drawing on the wide range of expertise and experiences present. Discussion will focus on the new demands facing regulators and central banks in implementing a risk-based approach to anti money laundering and combating the financing of terrorism (AML & CFT) in the light of recent Financial Action Task Force (FATF) reports and initiatives. Participants will also be offered the opportunity to express their main areas of interest for discussion during the course. The new FATF National Risk Assessment Methodology Richard Chalmers, Adviser, International, at the UK s Financial Conduct Authority In February 2013 the FATF introduced revised guidance on how best to carry out a national risk assessment. Although the guidance is not a standard it does outline practices which, if carried out correctly, would lead to compliance with FATF standards. The guidance therefore gives an important insight into FATF expectations of National Risk Assessments and presents an opportunity to AML & CFT practitioners and their institutions to `benchmark their work. In this session, the speaker, who co-chairs the FATF working group on evaluations and implementation, will examine the new guidance and highlight areas of significant divergence from previous recommendations. Discussion will focus on the underlying aims of the recommendations in order to better understand the outcomes which the FATF are hoping to achieve. Delegates will be invited to share their experiences of national risk assessments highlighting challenging areas. Identifying and acting on AML & CFT deficiencies Speaker to be confirmed Following the mutual evaluation report of October 2009, New Zealand was placed on the FATF s regular follow-up process. Since then the jurisdiction has implemented a number of measures such as implementing preventative AML sanctions and putting preventative legislation in place. The authorities have also introduced a new cross-border cash reporting regime and established three new statutory supervisors. In October 2013 New Zealand was removed from regular follow up process due to the new measures they had put in place. Similarly Nigeria and Morocco have also recently been removed from the FATF s monitoring process having made significant improvements to their legal and regulatory frameworks. This session will draw on the work of these countries in making improvements to their AML & CFT regimes identifying quick wins and offering good practice guidance for strengthening a national AML & CFT regime. About the course chairman Richard Pratt is a consultant on financial services regulation. He conducts assessments of, and provides advice to, a range of regulatory authorities on anti-money-laundering defences, on capital market regulation, on governance and operational issues for financial services regulators, on international regulatory cooperation, and on other regulatory issues. He has carried out work in Central and Eastern Europe, Africa, Middle East, South Asia, South Pacific and the Caribbean. Mr Pratt was formerly the director general of the Jersey Financial Services Commission. He is now also an Ombudsman for KPMG and a Justice of the Peace in the UK.

4 Windsor, 2014 Wednesday 7 May Building the Risk-based Framework Implementing the enhanced risk-based framework Jean-Pierre Michau, Adviser to the Governor, Banque de France Understanding the sources, methods and extent of money laundering and terrorist financing in a particular country or jurisdiction is essential for supervisors and regulators to combat financial crime and prioritise resources. However, identifying risks is just the start of the process. Once they have been identified measures need to be put in place to address them. This can be a challenging process as the underlying risk assessment needs to be ongoing, as does the assessment of the policy which is in place to tackle such risks. This session will offer guidance on good practice for the implementation on a national scale. Case-study: supervision of designated financial institutions risk-based approach Speaker to be confirmed Understanding the requirements of customer due diligence, building a solid customer profile, and establishing an effective internal control and audit system are essential to a successful anti-money-laundering regime, at the business level. It is the regulators obligation, however, to introduce effective supervision of compliance using appropriate regulations, guidance, inspections, and sanctions. This session will discuss the enhanced and simplified requirements, the threshold of suspicion, and draw on a case study to illustrate how to successfully supervise designated financial institutions in their implementation of the risk-based approach. Identifying threats in payment systems and wire transfers Tina Blocksidge, Nominated Officer, Lloyds Bank Key to a financial institution s ability to carry out a high volume and geographical diversity of activities is the safety and efficiency of its payment systems. The high volume of domestic and international payments which a financial institution makes on a daily basis must all be monitored using a risk-based approach to ensure the institution is not at risk of handling illicit funds. This can prove problematic as it requires the institution to have an extensive knowledge of its customers and their customers customer. This session will examine the key risks faced by international financial institutions, focusing particularly on how to identify and manage risks in payment systems. Demonstrating compliance and effectiveness John Aspden, CEO, Financial Supervision Commission, Isle of Man The FATF s new assessment methodology now requires evidence not only of technical compliance but also of the effectiveness of the AML & CFT regime in place. How are these evaluations conducted, and what do supervisors need to understand about the evaluation process? How can financial market authorities best cooperate with this scrutiny to achieve the most positive outcome? This session takes a comprehensive approach to look at how authorities can best prepare for, and get the most from, an external assessment. Too big to jail? Overseeing AML sanctions in multinational financial institutions Workshop led by John Aspden and Richard Pratt Recent cases involving large multi-national financial institutions have highlighted the difficulties in overseeing the AML & CFT procedures of institutions with a number of international branches. The systemic importance of such institutions can also make bringing sanctions against them a complicated process. In this session the speakers, who have personal experience of both assessing financial institutions and being subject to assessment themselves, will provide delegates with practical examples from high profile cases in which institutions have been found to have poor levels of risk management and asked to assess the impact which the institution s actions, or lack of actions, had on their control of AML & CFT risks.

5 AML & CFT: Implementing a Risk-Based Framework Thursday 8 May Identifying Threats in the Financial System Taking a risk-based approach to countering the financing of terrorism Speaker to be confirmed AML & CFT are often grouped under the same guidelines. However there are indicators and risk factors which can be used to specifically identify the financing of terrorism. Terrorist financing can be seen as reverse money laundering, as funds are often taken from legal sources and used for criminal intentions. Measures to address it such as closely monitoring charities, Non-governmental organisations and international value transfer systems must be carefully applied so as not to drive terrorist financing channels further underground and make them even harder to monitor. This session will look at the specific characteristics of terrorist financing and how to take a risk-based approach towards it. The United Nations Convention Against Crime as a tool to tackle ML risks Badr el Banna, Criminal Justice Officer, Corruption and Economic Crime Branch, United Nations Office on Drugs and Crime Money laundering and corruption are fundamentally linked and there are clear benefits from combining efforts to combat them. Combatting corruption is high on the international agenda. The G20 requested that the FATF strengthen its measures on anti-corruption which led to stricter requirements on customer due diligence, beneficial ownership and politically exposed persons being included in the 2012 recommendations. The recommendations also required members to fully implement the United Nations Convention Against Corruption (UNCAC). In this session the use of anti-corruption measures, specifically UNCAC, to tackle money laundering risks will be explored and guidance given on good practice. Defining politically exposed persons James Maton, Partner, Edwards Angell Palmer & Dodge UK LLP In June 2013 the FATF released updated guidance on Politically Exposed Persons (PEPs) defining them as anyone who has a prominent public function. But how can PEPs be defined in practice? Once defined, monitoring and reducing the money laundering risk surrounding PEPs can also be challenging as the action is preventative rather than criminal and should not prevent PEPs from carrying out legitimate business. This session will consider the challenges of preventative action, as well as issues with reconciling the different needs of civil and common law systems, the use of asset seizure and confiscation, and the use of AML & CFT reports to identify corruptions. Past attendees include: Bank of Algeria Reserve Bank of Australia Austrian National Bank Central Bank of Barbados Central Bank of Brazil British Virgin Islands Financial Services Commission Bank of Canada Central Bank of Colombia Czech National Bank Central Bank of Ecuador Banque de France European Central Bank Bank of Ghana Central Bank of Honduras Hong Kong Monetary Authority Central Bank of Hungary Reserve Bank of India Bank Indonesia Bank of Jamaica Central Bank of Kenya Bank of Korea Bank Negara Malaysia Reserve Bank of New Zealand Central Bank of Nigeria Central Bank of Oman State Bank of Pakistan Central Bank of Paraguay Central Bank of the Philippines Central Bank of Qatar National Bank of Romania SAMA Monetary Authority of Singapore South African Reserve Bank Bank of Spain Central Bank of Sri Lanka Sveriges Riksbank Bank of Tanzania Bank of Thailand Bank of England Federal Reserve Bank of New York Bank of Zambia

6 Windsor, 2014 Friday 9 May Risks in New Payment Methods Combatting the use of unregulated payment methods in low income groups through financial inclusion Speaker to be confirmed Implementing and adhering to AML&CFT regulations cost. Indeed the additional costs can act as barrier to low income groups becoming part of the formal financial system. Exclusion from the formal financial system can lead to low income groups using unregulated services. Wide usage of these methods can heighten money laundering and terrorist financing risks as transactions go unsupervised. The FATF and the G20, have both, in recent years outlined their commitment to expanding financial inclusion. In this session, the speaker will discuss how national authorities can square this circle without jeopardising the integrity of the financial system. Liberty Reserve and Perfect Money: cybercrimes and money laundering Jean-Loup Richet, Information Service Manager, Orange & Research Associate, ESSEC Business School The anonymous nature of the internet can provide abundant opportunities for criminals to launder illicit funds, and transfer funds to terrorist groups going undetected by authorities. Methods such as laundering money through online games, where virtual currency can be bought traded and moved between games, and using Paypal accounts to micro-launder are on the rise. Additionally services such as Liberty Reserve (although now closed down) and Perfect Money allow criminals to make completely anonymous transactions. This session will look at the fast paced development of online money laundering methods as well as the risks of more traditional payment methods. Chairman s conclusion Richard Pratt In this session the chairman will highlight the key issues which have arisen over the course of the seminar. There will be opportunity for delegates to offer their opinions on the key themes of the sessions and raise any remaining points they may have. Audience members will also be encouraged to comment on what they have learnt from the seminar and how they will implement this knowledge upon returning to their institution. CBP s Spring Series 2014 also features the training seminars: Strategic Planning and Change Management for Central Banks Chair: Janet Cosier, former Adviser on Strategic Planning and Risk Management, Bank of Canada Financial Stability: Designing and Implementing Macroprudential Policy Chair: E. Philip Davis, Principal Research Fellow, NIESR, and Associate Professor at Brunel University Central Bank Governance: the Role of the Board Chair: John Jussup, former General Counsel and Corporate Secretary, Bank of Canada Central Bank Statistics: From Data Delivery to Analytical Value Add Chair: Agnes Tardos, Director and Head of Statistics, Central Bank of Hungary New Developments in Banknote and Currency Management Chair: Antti Heinonen, Chairman of Banknote Ethics Initiative, and former Director, Banknote, European Central Bank Effective Internal Audit for Central Banks Chair: Paul Apps, former Head of Audit, Reserve Bank of Australia

7 AML & CFT: Implementing a Risk-Based Framework Booking details Course fee: 2,900 4-Day (3 nights) residential course Course fee includes: en-suite accommodation, meals, refreshments, course documentation and a complimentary copy of the most recent issue of the Central Banking journal. Substitute delegates can be accepted should the registered delegate be unable to attend; please let us know prior to the event. How to book There is a booking form overleaf. Please use one of the following methods to book your place: Online: Call: Clare Hope on +44 (0) conference@centralbanking.com Fax: Attention of Central Banking Events to +44 (0) Post: Central Banking Publications Incisive Media Haymarket London SW1Y 4RX, UK The venue Cumberland Lodge, The Great Park Windsor, Berkshire, SL4 2HP The 2014 Spring Series will take place at the Cumberland Lodge in Windsor. Set in the tranquil heart of Windsor Great Park, only 27 miles from London and a short distance from Heathrow airport, the Cumberland Lodge is perfectly placed for local, national and international meetings. Dining and accommodation are top class and the atmosphere is that of a friendly country house. About Central Banking Publications Central Banking Publications events division is the leading independent organiser of public policy seminars/training courses for the official sector. Since 1999, CBP has hosted roundtable seminars and training courses for over 4,500 senior policymakers from central banks, ministries of finance and financial regulatory agencies around the world. Senior officials from more than 140 countries have attended these meetings over the past decade and a half.

8 AML & CFT: Implementing a Risk-Based Framework 1. Delegate details: PLEASE WRITE IN CAPITALS Mr/Mrs/Ms: Surname/Family name: First name: Job title: Organisation: Address: Postcode: Telephone: Facsimile: 1: 2: Please provide us with the direct address of the delegate and an additional address if possible. This is very important because all correspondence with delegates is by . Course fee: 2, Payment details: Invoice: If you select this option an invoice will be sent to you by and by post. If you would like to provide different details to the above for the invoice please notify us when sending back the booking form. Credit card: please charge 2,900 to my Visa Mastercard American Express Card No: Cardholder name: Cardholder address (if different from above): Security Code: Expiry date: Signature: Date: I have read and agree to the terms and conditions below. Signature: Terms & Conditions: A refund (less 10% administration fee) will be made if notice of cancellation is received in writing three weeks before the event. We regret that no refunds can be given after this period. In addition delegates are wholly responsible for obtaining any necessary entry visas and refunds cannot be given as a result of non-attendance arising from a failure to secure such visa. A substitute delegate is always welcome at no extra charge. The programme may change due to unforeseen circumstances, and Incisive Media reserves the right to alter the venue and/or speakers. Incisive Media accepts no responsibility for any loss or damage to property belonging to, nor for any personal injury incurred by, attendees at our conferences, whether within the conference venue or otherwise. Data protection: by registering for a Central Banking training course you will receive further information relating to this event. In addition we will send you information about our other relevant products and services which we believe will be of interest to you. If you do not wish to receive other relevant information from Incisive Media via a particular medium please click the following relevant boxes: mail phone fax Incisive Media will also allow carefully selected third parties to contact you about their products and services. If you do not wish to receive information from third parties via any of the following media please tick the relevant boxes: mail phone. Please tick if you are happy to receive relevant information from carefully selected third parties by and fax. Registered Office Haymarket House, Haymarket, London, SW1Y 4RX UK. Registered in England and Wales number VAT No. GB P Date: