Webinar 01: AML/CFT Requirements Overview. 4 th July 2018

Transcription

1 Webinar 01: AML/CFT Requirements Overview 4 th July 2018

2 About Your Presenter Neil has a unique background in financial crime risk management, spanning 25 years. This includes working within Law Enforcement agencies investigating domestic and international money laundering, and as an AML/CFT Regulator (UK FSA) developing AML regulation and supervision techniques. He has also worked at senior levels managing AML/CFT compliance across Europe, the US, Latin America, Asia and Australia/New Zealand within three major European financial services companies, and one of the major Australian/New Zealand bank group. Neil has extensive experience in designing and implementing policy and controls to address AML/CFT compliance and since August 2012 has working as an independent consultant advising on AML/CFT matters. Neil is member of the faculty and lectures on the International Compliance Association (ICA) Diploma of Applied Anti Money Laundering and Counter Terrorism Management. He was founding Joint-Chair of the Association of Certified Anti-Money Laundering Specialists (ACAMS) Australasian Chapter. Neil provided Expert Witness support to the Australian government s recent enforcement against CBA which resulted in CBA paying a $700 million fine. Neil has regularly attended the Private Sector Expert forum of the Financial Action Task Force (FATF) and is a founding member of the FATF s RegTech Forum.

3 Agenda Todays Agenda is.. What is money laundering & terrorist financing The stages of money laundering The legal and regulatory regime The penalties under the AML/CFT Act The obligations under the AML/CFT Act ML/TF risk assessment AML/CFT programme

4 Money Laundering - ML Money laundering takes many forms and includes: The process of concealing the existence or illegal source of income derived from criminal activity; Converting criminally derived funds, assets or property into apparently clean funds, assets or property by moving it into the legitimate financial system; Handling the proceeds of crimes such as theft, fraud and tax evasion; or The transfer, movement or involvement with criminally derived funds, assets or property.

5 Terrorist Financing TF Terrorist financing also takes many forms and is more difficult to detect than money laundering. It is associated with: The provision of money to further terrorist acts; The provision of money to support the living expenses of terrorists; and/or The acquisition, movement or realization of assets controlled by terrorists. The major differences between terrorist financing and money laundering are: TF does not necessarily involve dirty money; in fact it often uses legitimately obtained income. TF until recently has thought to involve small amounts of money. ISIS enterprise based TF has changed that view.

6 Three Stages of Money Laundering What stages of ML/TF is your business vulnerable to?

7 Anti-ML / Counter-TF = AML/CFT As the terms suggest AML/CFT describe the concept of preventing Money Laundering and Terrorist Financing. The AML/CFT requires those covered to detect, deter, and report money laundering and terrorist financing.

8 Why does New Zealand have AML/CFT Laws New Zealand wants to reduce acquisitive crime, money laundering and reduce the risk of terrorism financing. New Zealand requires businesses sectors vulnerable to money to being used to launder money and finance terrorism to comply with AML/CFT laws. In New Zealand and other countries AML/CFT is for the benefit of our communities - If it is harder for criminals and terrorism financiers to move money then our communities are safer for our families.

9 AML/CFT Legal and Regulatory Basis The AML/CFT Act sets out obligations. Regulations contain minimum standards, thresholds, etc. These are mandatory and must be followed. Guidelines outline other non-binding guidance from supervisors.

10 AML/CFT Act Breaches and Penalties Part 3 of the AML/CFT Act sets out the penalties and breaches. Per breach of the AML/CFT Act: Senior Management could be fined up to $200,000 personally and/or face a term of imprisonment up to two years The firm could incur a fine as high as $2 million If conduct leading to the breach of the Act is knowingly or recklessly then the fines escalate up to $300,000 personally and/or a term of imprisonment up to two years for Senior Managements partners and up to $5 million for a firm Examples of breaches include: Failure to establish, implement, or maintain an AML/CFT Programme, Failure to conduct customer due diligence (CDD) Failure to keep records Failure to report suspicious activity

11 AML/CFT Requirements Basic obligations imposed on reporting entities include: Designate someone in your business as an AML/CFT compliance officer Assess and document the money laundering and terrorist financing (ML/TF) risks your business may face Establish an AML/CFT compliance programme setting out how you ll detect and manage these risks This includes: Assessing the money laundering and financing of terrorism risk that it may reasonably expect to face in the course of its business; Establishing, implementing and maintaining an AML/CFT Programme (procedures, policies and controls) to detect, manage and mitigate the risk of money laundering and the financing of terrorism;

12 And on a ongoing basis Verify the identity of client before providing any service covered by the AML/CFT Act. Submit a Prescribed Transaction Reports to the NZ Police Financial Intelligence Unit (FIU) if a client wants to conduct A transaction in cash that is $10,000 or more, or An international wire transfer of $1000 or more Monitor clients to identify potential warning signs of money laundering and terrorism financing. Report suspicious activity to the NZ Police FIU Regularly review your risk assessment and compliance programme Have an audit of risk assessment and compliance programme every 2 years Submit an annual compliance report to the Department of Internal Affairs

13 ML/TF Risk Assessment You can make risk assessment as complex as you like but if you make it complex will you understand and be able to articulate the risks any better? To assess the risk you need to understand The External and Internal Environment a business operates in Vulnerability of Customers Vulnerability of Business Vulnerability of Products and Services Vulnerability of Channels (methods) used to engage customers and of deliver services Countries that you dealt with

14 AML/CFT Programme Requirements An AML/CFT programme sets out a reporting entity s internal policies, procedures and controls to detect money laundering and financing of terrorism and to manage and mitigate the risk of it occurring. The programme must be in writing and be based on its risk assessment. Certain elements of a programme are specifically required by the Act, including: Vetting senior managers and staff; Training senior managers and staff; Customer Due Diligence, including enhanced CDD; Reporting suspicious activity; Monitoring Record keeping; and Monitoring and managing compliance with the AML/CFT programme. Reporting entities have considerable flexibility, within the limits prescribed by the Act and Regulations, in how they meet their obligations.

15 How we can help

16 How can we help? Initialism brings together over 30 years of expert knowledge and real world experience to help businesses comply with their AML/CFT obligations. Our unique background in AML/CFT compliance and ML/TF risk management allows us to deliver proportionate and business-sensitive solutions. Unparalleled expertise In-depth industry knowledge Real world perspectives Decades of compliance and regulatory Deep domain expertise Qualified AML/CFT trainers experience Initialism are co-founders of the AML Accelerate platform, which delivers foundational AML/CFT compliance in a guided and structured way that saves you time, money and effort.

17 Our Solutions As a co-founder and authorised reseller of AML Accelerate, Initialism is able to offer fast, easy and cost effective solutions to help businesses achieve and maintain AML/CFT compliance. AML Connect Online Compliance A webinar -guided and online supported route to meeting obligations. AML Complete Guided Compliance A highly interactive face to face workshop that delivers fast and easy AML/CFT compliance. AML Consult Custom Compliance One to One Support from our experts to assist in achieving AML/CFT compliance. Our solutions enhance in-house capacity and capability, providing structured access to expert support.

18 Other Webinars in the Series Webinar 02: How to Undertake a ML/TF Risk Assessment 10 th July at 12.30pm Webinar 03: How to Undertake Client Due Diligence 12 th July at 12.30pm Webinar 04: Client Activity and Behaviour Monitoring 17 th July at 12.30pm Webinar 05: Reporting Suspicious Activity and Other Prescribed Transactions 19 th July at 12.30pm Webinar 06a: AML/CFT Compliance Challenges for Real Estate Businesses - 30 th July at 12.30pm Webinar 06b: AML/CFT Compliance Challenges for Accountancy Businesses - 31 st July at 12.30pm

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