How to Implement a Risk-Based Framework for AML & CFT

Transcription

1 Since 1999, Central Banking Publications has organised annual residential training courses/seminars which have been attended by more than 4,000 central bankers and supervisors from over 140 countries. How to Implement a Risk-Based Framework for AML & CFT April 2013, Cumberland Lodge, Windsor, UK Course Chairman Richard Pratt International Consultant in Financial Services Regulation Series Advisor Charles Goodhart Professor Emeritus London School of Economics

2 Dear delegate, In November 2012, the G20 ministers of finance and central bank governors made it clear what their priorities were for anti-money laundering and combatting the financing of terrorism: We encourage all countries to adapt their legal framework with a view to complying with the revised FATF s Recommendations, in particular the necessity to identify the beneficial owner of corporate vehicles, and we look forward to the assessment of the effectiveness of the measures countries take and their compliance with the global standards in the next round of Mutual Evaluations. Released in spring 2012, the FATF s revised set of recommendations have set the agenda for the work of central banks and regulators in anti-money laundering and countering terrorist financing (AML & CFT) for years to come. The recommendations emphasised the importance of an enhanced risk based approach to an AML & CFT framework. The objective of the enhanced risk based approach is to ensure that resources are used as efficiently as possible. Key to the approach is the identification and understanding by each country, of the risks faced to them specifically, and the application of resources accordingly. Further, new typologies from the FATF 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. As the communique makes clear, effectiveness will be monitored and compliance is the expectation. 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 a roster of expert speakers including: Theodore Greenberg, Former Senior Financial Specialist, Financial Market Integrity Unit, The World Bank Richard Chalmers, Adviser in International Strategy and Policy Co-ordination, UK Financial Services Authority Marcus Killick, CEO Gibraltar Financial Services Commission John Aspden, CEO, Financial Supervision Commission, Isle of Man Each session affords 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. This format, as more than 4,000 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 22 April. Yours sincerely, Robert Pringle, Chairman Central Banking Publications

3 How to Implement a Risk-Based Framework for AML & CFT Monday 22 April Implementing Revised AML & CFT Recommendations Introduction 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 in the group. 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 light of G20 statements and recent Financial Action Task Force (FATF) reports. Participants will also be offered the opportunity to express their main areas of interest for discussion during the course. FATF: the new agenda for central bankers and regulators Richard Chalmers, Adviser in International Strategy and Policy Co-ordination, UK Financial Services Authority At the FATF plenary meeting in February 2012, the FATF adopted key changes to its standards. These changes included: promoting the use of an enhanced risk-based approach, tightening rules on politically exposed persons and new recommendations on the financing of weapons of mass destruction. These changes, in addition to other new typologies released by the FATF, have resulted in a formidable agenda for national regulators and central banks charged with keeping laws up to date and demonstrating compliance to international assessors. The speaker, who recently co-chaired the FATF working group on evaluations and implementation, will review developments in the FATF s agenda, including changes to the standards, analyse the implications from the regulator s perspective, and assess the impact on the day-to-day work of regulators. Group discussion will consider the progress made with accommodating the updated standards and the direction of future regulations. The AML & CFT framework: key elements and new threats Badr El Banna, Senior Compliance Examiner, Special Investigations Commission Lebanon (invited) Regulation varies from country to country due to differences in the national legal framework and in the regulator s powers, duties and the constraints it faces. Yet all regulators have to commit to a professional approach to transparency, objectivity, a methodical approach, strong technical knowledge, continuous learning and high standards. In this session the speaker will discuss the core elements of AML&CFT regulation and draw on his experience of assessing AML&CFT compliance in financial institutions to assess the most common problems regarding implementation. The practical realities of identifying risks Theodore Greenberg, Former Senior Financial Specialist, Financial Market Integrity Unit, The World Bank Procuring reliable information to be able to assess the level of an institutions exposure to money laundering and terrorist financing threats is the initial challenge facing those who wish to implement the risk-based approach. As the perpetrators of financial crimes are constantly developing new ways to remain undetected, authorities must also be flexible and innovative in their approach to identifying risks. In this session the speaker will draw on his own knowledge and experiences to offer a series of case studies which will demonstrate some practical examples of identifying risks. Well and organised and run, with knowledgeable speakers with real-life examples. Keep up the good work for future courses Linette Wilson, Head of Banking Department, bank of Jamaica

4 Windsor, 2013 Tuesday 23 April Building the Risk-Based Approach A risk-based approach: key issues to implementation Marcus Killick, CEO, Gibraltar Financial Services Commission Financial centres have different characteristics which give rise to different money-laundering and terroristfinancing risks. 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, the implementation of a risk-based approach presents an array of challenges to central banks, regulators and the institutions they supervise. In this session, the speaker will discuss these and how they can best be met. Identifying and tackling threats from designated non-financial businesses and professions Andrew Le Brun, Director of International Policy, Jersey Financial Services Commission (invited) FATF recommendations require countries to implement measures that oblige financial institutions and nonfinancial business and professions (DNFBP) to prevent the misuse of their businesses in money laundering and terrorism financing. This session draws on the experience of a regulator in a jurisdiction with extensive experience in this area to discuss the role of designated non-financial businesses and professions and the risk of money laundering through trust and company service providers. The speaker will also discuss the method of using self-regulatory organisations for ensuring compliance. Relations between the supervisor and the Financial Intelligence Unit (FIU) David Thomas, Consultant and former Head, UK FIU, Serious Organised Crime Agency Financial intelligent units are a crucial element of the anti-money-laundering regime. They have a national responsibility for receiving, analysing and disseminating financial intelligence submitted through the suspicious activities reports (SAR) Regime. Cooperation is a key element of a country s fight against AML & CFT, and it is important good relations between financial supervisors and their respective FIU s are maintained. This session, led by a former head of UK FIU, will focus on the role of FIU, the uses of FIU intelligence, and the sharing of information between an FIU and regulators. The role of designated financial institutions Maud Bokkerink, Senior Specialist, Integrity Supervision, The Netherlands Bank 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. It is the regulators obligation to introduce effective supervision of compliance using appropriate regulations, guidance, inspections, and sanctions. This session, led by a senior specialist from the Netherlands Bank, will discuss the enhanced and simplified requirements, the threshold of suspicion, and make case studies to illustrate how to fulfil the obligations on designated financial institutions. How to work with the private sector Sally Scutt, Deputy Chief Executive, British Bankers Association What is the role of the private sector in developing rules? This session will focus on examples of where the private sector can provide added value in devising workable proportionate rules, commenting on new initiatives and working in partnership with regulatory and supervisory authorities. The speaker, from the British Bankers Association, will discuss the work of the Joint Money Laundering Steering Group, a tradeassociation based group, in providing practical assistance in interpreting regulations and spreading good practice in countering money laundering.

5 How to Implement a Risk-Based Framework for AML & CFT Wednesday 24 April Demonstrating Regulatory Compliance Demonstrating success John Aspden, CEO, Financial Supervision Commission, Isle of Man Today, financial supervisors themselves are expected to submit to evaluation by international examiners. Such evaluations now focus not only on the financial regulatory regime in general, but specifically on how well the regime works to combat money laundering and terrorist financing. 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. Workshop: lessons learned from high profile cases Led by John Aspden and the Chairman When an institution is found to have lapses in their AML & CFT measures, business practices which obscure the source of funds, or links with businesses or individuals in jurisdictions which are deemed to have AML &C FT deficiencies, there is often cause for regulators to launch an investigation. 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 recent high profile cases in which institutions have been found to have fallen short of the expected levels of risk management. Delegates will be asked to assess the impact which the institutions actions, or lack of actions, had on their control of AML & CFT risks. Expanding financial inclusion: an AML & CFT dilemma? Christine Mweti, Partner, Coulson Harney Advocates (invited) Financial inclusion is increasingly being recognised as an important part of the financial policymaker s remit. Last year, the FATF released guidelines on how to ensure that AML & CFT controls were not inhibiting financial inclusion as overly strict controls can prevent legitimate consumers from entering the financial system. In this session the speaker, a partner at a prominent Kenyan law firm and a former head of legal affairs at the Kenyan Capital Markets Authority, will discuss the challenges of balancing an effective risk-based AML & CFT framework with the desire to expand financial inclusion in light of the recent FATF guidelines. 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. Mr Pratt was previously director general of the Jersey Financial Services Commission. He was a member of the implementation committee of IOSCO and of the task force that drafted the IOSCO multilateral MoU, and participated in the FATF review of its recommendations on money laundering and terrorist financing.

6 Windsor, 2013 Thursday 25 April Reducing Risk Exposure Politically exposed persons: rules and reality James Maton, Partner, Edwards Wildman Palmer UK LLP Combating money laundering and the financing of terrorism requires that regulatory authorities compile and keep up-to-date lists of suspicious persons and organisations in identifying corruption. FATF recommendations require supervisors to pay particular attention to politically exposed persons (PEPs, ie, high-risk individuals who may be conduits for looted funds). 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. How does an international financial institution manage its AML & CFT framework? Tina Blocksidge, Nominated Officer, Lloyds Banking Group A modern international financial institution can face huge regulatory and reputational risk in connection with money laundering and terrorist financing due to the sheer volume, variety, and geographical diversity of its activities. The high volume of domestic and international payments which a financial institution makes on a day to day basis must all be monitored to ensure that the institution is not at risk of handling illicit funds. This can prove problematic as it requires the institution not only to know their customers, but know their customers customer and whether they should be considered a higher risk party. This session will examine the key risks faced by international financial institutions, focusing particularly on how to identify and manage risks in payment systems. Course 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. Delegates 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 training course/seminar series, Spring 2013: Strategic Planning and Change Management for Central Banks New Development in Banknote and Currency Management Financial Stability: Designing and Implementing Macroprudential Policy Supervision of Islamic Financial Institutions, Markets and Products Central Banks Governance: the Role of the Board Central Bank Statistics: Domestic and International Challenges How to Implement a Risk-Based Framework for AML & CFT Effective Internal Audit for Central Banks

7 How to Implement a Risk-Based Framework for AML & CFT Booking details Course fee: 2,800 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 Please complete and return the registration form overleaf to: Central Banking Publications Incisive Media Haymarket London SW1Y 4RX, UK telephone: +44 (0) fax: +44 (0) conference@centralbanking.com website: Central Banking Publications has given us a great opportunity to share the pressing issues faced by central banks in the world. Shubhangu V, Latey, Reserve Bank of India The venue Cumberland Lodge, The Great Park Windsor, Berkshire, SL4 2HP The 2013 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 4,000 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 How to Implement a Risk Based Framework for AML & CFT 1. Delegate details: PLEASE WRITE IN CAPITALS Mr/Mrs/Ms: First name: Job title: Organisation: Address: Telephone: Facsimile: 1: 2: Surname/Family name: Postcode: 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: 2,800 UK VAT of 20% is applicable to the London event. If your organisation is VAT registered, your VAT no. must be supplied here 2. Payment details: Bank transfer: The Royal Bank of Scotland, 62/63 Threadneedle Street, London EC2R 8LA, UK A/c No: Sort code: IBAN: GB89 RBOS Swift code: RBOSGB2L Please pay the course fee net of all bank charges and send us the copy of the transfer details Credit card: please charge to my Visa Mastercard American Express Card No: Cardholder name: Cardholder address (if different from above): Security Code: Expiry date: Signature: Cheque: I enclose a cheque for Date: payable to Incisive Financial Publishing Ltd. I will require accommodation from I have read and agree to the terms and conditions below. to Signature: Date: Terms & Conditions: Cancellations must be received in writing more than three weeks before the event. If a cancellation is received within three weeks of the event the delegate fee will be payable in full. Cancellations more than three weeks before the event are subject to a 10% administration fee. A substitute delegate is always welcome, but the organiser MUST be notified in advance of the event to avoid incurring a charge. Delegate substitutions may NOT be made at the event. If you do not attend the event or notify us of your intention to cancel, the full fee will still be payable. Non-EU nationals are wholly responsible for obtaining any necessary entry visas and refunds cannot be offered as a result of non-attendance arising from a failure to secure such visa. 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.