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JOINT FINANCIAL INTELLIGENCE UNIT
Stewart McGlynn
Chief Inspector of Police
Joint Financial Intelligence Unit
AML Seminar to Lawyers - JFIUAML Seminar to Lawyers - JFIU3 March 20103 March 2010
JOINT FINANCIAL INTELLIGENCE UNIT
Suggested format & content detailed in JFIU website
Fax
Post
Verbal (urgency - follow-up by hardcopy)
STR Filing
JOINT FINANCIAL INTELLIGENCE UNIT
Urgency
Confidentiality
Tipping Off
Crime Report Vs STR
Concerns
JOINT FINANCIAL INTELLIGENCE UNIT
Acknowledgement of Receipt File Ref. Contact Person Details
Consent / No Consent Letter
Arrest / Prosecutions / Convictions
STR Quarterly Analysis Report
Feedback
JOINT FINANCIAL INTELLIGENCE UNIT
STR
Case Example 1
JOINT FINANCIAL INTELLIGENCE UNIT
Walk-in Client
Background Not Known
Purchase of sizeable commercial property investment
Source of finance unknown
STR Report Made
JOINT FINANCIAL INTELLIGENCE UNIT
Learning Points
Poor / Negligible CDD / KYC
Absence of risk based approach
Sub Standard STR
JFIU unable to make assessment
What would you think?
JOINT FINANCIAL INTELLIGENCE UNIT
Case Example 2
HK$ 170 MillionMr. X Resident inIn CountryY Company B
Company A
Law Firm12 installments of cash / cashier order
JOINT FINANCIAL INTELLIGENCE UNIT
Effective CDD / KYC
Risk based approach
Good quality STR, allowing JFIU to perform its function
Protection for you
Learning Points
JOINT FINANCIAL INTELLIGENCE UNIT
Case Example 3
UK Resident Mr. X
Paid US$ 316,750.00
Fake Letter from a local bank
PRC Pity worth US 8.35M
Mr. Z of law firm
Company A
Company C
Company B
JOINT FINANCIAL INTELLIGENCE UNIT
Learning Points
Reported knowledge of Crime Proceeds – Fraud
Crime report could have been made but STR acceptable in this case
Urgency? Unsure? Contact JFIU
JOINT FINANCIAL INTELLIGENCE UNIT
Case Example 4
Mr.X , a HKID holder
Law Firm
Purchase price HK$ 7,349,000
Paid Down-payment HK$ 734,900 (10%)
$ from gambling
JOINT FINANCIAL INTELLIGENCE UNIT
Learning Points
Common sense, proportionate approach to KYC and CDD
If it looks like a duck……….
No risk of prosecution
JOINT FINANCIAL INTELLIGENCE UNIT
Country Comparison STR filed by Law Firms
Country 2005 2006 2007Law Firms in
2008
Singapore0/2,076
(0%)
2/3,290
(0.06%)
2/7,621
(0.03%)806
UK
10,525/
195,702
(5.38%)
7,296/
213,202
(3.42%)
11,300/
220,484
(5.13%)
N/A
HK5/13,505
(0.04%)
11/14,557
(0.08%)
9/15,457
(0.06%)135
JOINT FINANCIAL INTELLIGENCE UNIT
STR filed by Law Firms
2005 2006 2007 2008 2009
No. of STR Received
13,505 14,557 15,457 14,838 16,062
Filed by Law Firms
5 11 9 35 70
Percentage (%)
0.04% 0.08% 0.06% 0.24% 0.44%
JOINT FINANCIAL INTELLIGENCE UNIT
Some Final Thoughts
JFIU understands the burden that CDD and KYC entails
Law / International Standards
Increase in quality STRs from the sector desirable – intelligence is our business
JFIU is here to help – Contact us
JOINT FINANCIAL INTELLIGENCE UNIT
Contact JFIU
Telephone:2866 3366
Fax :2529 4013
Email:[email protected]
Mail:GPO Box 6555 Hong Kong
Telephone:2860 3547
