DEVELOPING ECONOMIES: REPUTATION MANAGEMENT

Transcription

1 ANTI MONEY LAUNDERING KEY CONSIDERATIONS FOR DEVELOPING ECONOMIES: REPUTATION MANAGEMENT Dalia Littlewood. October 26 th, 2012

2 The Ultimate in Money Laundering INLAND REVENUE

3 YES JUDGE, I SAVED ENOUGH CASH TO PAY MY MONEY LAUNDERING FINE

4 AML Success It s All About Adherence to Local Law Right?

5 AML Success It s All About Adherence to Local Law BUT It s much broader than that!

6 Four Things to Cover Today 1.Reputation Management: Lessons from Brands 2.Reputation Management: The Linkage to AML 3. Reputation Management: Barbados AML 4. Lessons for going forward

7 Reputation Management: Key Lessons from Personal and Corporate Brands

8 A Personal Brand Scandal November 2009

9 Reputation is Money 22% Higher Brand Recall 16 % Higher Commercial Recall 39% Higher Product Likeability

10 Reputation is Money

11 and Perception is Reality

12 Other Personal Brands and Reputation

13 Warren Buffet: It takes 20 years to build a reputation and 5 minutes to ruin it If you think about that, you will do things differently

14 Perceptions: Business Reputation 60% Reputation 40% Product Reputation Institute

15 BMW #1 Reputation (2011) High quality

16 Apple #5 in the world on reputation

17 Reputation Management: The Linkage to AML

18 Country AML Reputation is Multi-Dimensional. Global AML Industry Bribery and Corruption Tax International Treaties Crime Tax Transparency AML Compliance Country AML Reputation Financial Stability & Regulation Political and Legal Environment Human Trafficking Narcotics Extern nal Stakeholders International Business

19 Country Reputation and the 24/7 Information Landscape Advert i-sing Gover n- ment Cultural News TV Industr y Report s Policy Policy Radio Legal Blogs Intern et

20 Country Reputation is not Static Excellent Negative Event Reputatio on Poor Time

21 Country Reputation is a function of both Perception andreality Good Optimal Country Reputation REALIT TY WeakCountry AML Reputation Poor Poor Good PERCEPTION

22 Consider the Cayman Islands External Event REA ALITY Poor Good Cayman AML Reputation Perception (1991) Money Laundering Jurisdiction Reality (2012) Best Caribbean reputation in AML Mutual Evaluations Strong regulation Poor Good PERCEPTION

23 Trinidad and Tobago External Event REA ALITY Good Poor Trinidad AML Reputation Perception (1991) lack of confidence in regulatory oversight & governmental transparency Poor Good Reality (2012) Still shown as high risk Good News! effective Oct 19, 2012 removed from FAFT watch list PERCEPTION

24 Antigua External Event REA ALITY Good Poor Perception AML reputation is high risk Antigua AML Reputation Reality (2012) Extensive efforts to reverse reputational risk Last Caribbean nation remaining on FATF watch list Poor Good PERCEPTION

25 Key Lesson: AML Reputation is Multi-Dimensional Global AML Industry Bribery and Corruption Tax International Treaties Crime Tax Transparency Financial Stability Country AML Reputation AML Compliance Individual Entities Human Trafficking Political/Legal Narcotics Extern nal Stakeholders International Business

26 and AML Reputation can change over time Excellent AML Repu utation Negative Event Poor Time

27 Reputation Management: Barbados Country Reputation

28 Implications of a Negative AML Country Reputation Enhanced Due Diligence Perception by Clients of Country Stability Additional Audits by Overseas Banks, Custodians Increased Costs

29 A Multi-dimensional View of Barbados AML Reputation Global AML Industry Bribery and Corruption Tax International Treaties Crime Tax Transparency AML Compliance Financial Stability & Regulation Political and Legal Environment Human Trafficking Narcotics Extern nal Stakeholders International Business

30 Key Questions to Consider Where is Barbados AML Reputation Positioned? How is Barbados viewed on the global front from an AML Risk perspective? REALI ITY Good?? Is this reputational view based on the actual measurable comparative rankings? Poor?? Is any of the country reputation related to perceived risk of Barbados? Poor PERCEPTION Good What does Barbados need to do to competitively position itself as being a low risk jurisdiction?

31 Reports that Matter Comparative Rankings COUNTRY BARBADO S Financial System Stability Mutual Evaluation Report Yellow CAYMAN ANTIGUA BERMUDA TRINIDAD Green Red Yellow Red Yellow Green Orange Yellow Red Corruption Green Green Red Yellow Red Perception Index Sanctions Yellow Yellow Yellow Yellow Yellow Non- Cooperative Tax Haven Transparency Human Trafficking US State Dept Money laundering countries (INR) Green Green Green Green Green Green Green Green Green Green Yellow Not Rated Yellow Not Rated Yellow Yellow Red Red Green Yellow urce: Compilation of results analyzed from World Check, KYC360, AML Atlas, various international reports

32 100% COMPLIANT Shell Company Due Diligence Study by Country NON COMPLIANT Nations with at least 25 approaches

33 Reputation Management: Key Lessons Going Forward

34 Improving Barbados AML Scorecard 1. Proactively manage perceptions.

35 Improving Barbados AML Scorecard 1. Proactively manage perceptions. 2. Managing naming & shaming threats.

36 Improving Barbados AML Scorecard 1. Proactively manage perceptions. 2. Manage naming & shaming threats. 3. Be seen as a leader in international compliance matters.

37 What Future do you see for Barbados AML Reputation? REA ALITY Poor Good Scenario 1: Poor How will your entity be negatively impacted? PERCEPTION Scenario 2: How will your entity be positively impacted? Good The Difference is Reputation Management