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Derisking:ImplicationsforAML/CFTRegime
Dakar,SenegalAugust2017
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Topics1. Conceptofde-risking2. ConsistencyofderiskingwiththeFATFstandards3. Whysomefinancialinstitutionsde-risk4. Isderiskinganescaperouteforproperrisk
management?5. ImplicationstheemergingtrendforAML/CFT
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Session6– Derisking:ImplicationsforAML/CFTRegimeNewregulations,thecostofmanagingML/TFrisks,risingregulatorysanctionsandenforcementactionsaremakingitincreasinglyexpensiveforfinancialinstitutions,especiallybanks,indevelopedcountriestodobusinesswithsomebanks/clientsindevelopingcountries,includingthoseinWestAfrica,untiltheyareabletoprovethattheirAML/CFTprogrammescomplywithinternationalrequirements.Thishasledtothebanksterminatingorrestrictingtheirbusinessrelationshipswithindividualsandentitiesfromregionsthatareconsideredhigh-riskformoneylaunderingandotherfinancialcrimesorclientsthattheyconsidertopresentanunacceptablelevelofrisktotheinstitutions.Thesessionwilldiscusstheconceptofde-risking,whysomefinancialinstitutionsde-risk,andtheriskofderisking.Overall,thesessionwillprovideinternationalperspectivestothesubjectmatter;discusstheconsistencyofthisapproachwiththeFATFstandards,whetherthispracticeisanescaperouteforproperriskmanagement,andwhatimplicationsthisemergingtrendhasontheimplementationofglobalAML/CFTregime.
Programme
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• TheFATFRecommendations,June2012.InternationalStandardsonCombatingMoneyLaunderingandtheFinancingofTerrorism&Proliferation
• FATFGuidance,February2013.Anti-MoneyLaunderingandTerroristFinancingMeasuresandFinancialInclusion
• FATFGuidance,February2013.NationalMoneyLaunderingandTerroristFinancingRiskAssessment
• WorldBank,2013.GlobalRemittancesWorkingGroup.BarrierstoaccesstoPaymentsystemsinsendingcountriesandProposedsolutions.Special-PurposeNote
• BaselCommittee,January2014.SoundManagementofRisksRelatedtoMoneyLaunderingandFinancingofTerrorism
• WorldBank,2014.EmikoTodoroki,WameekNoor,KuntayCelik,andAnomaKulathunga.MakingRemittancesWork- BalancingFinancialIntegrityandInclusion
• WorldBank,October2015.ReportontheG20SurveyOnDe-RiskingActivitiesintheRemittanceMarket
References
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• FATFREPORT,October2015.EmergingTerroristFinancingRisks• IMF,June2016.PreparedbyMichaelaErbenová,YanLiu,NadimKyriakos-Saad,
AlejandroLópez-Mejía,GiancarloGasha,EmmanuelMathias,MohamedNorat,FranciscaFernando,andYasminAlmeida.TheWithdrawalofCorrespondentBankingRelationships:ACaseforPolicyAction
• IMF/WORLDBank2016AnnualMeetingsSmallStatesFormSpeech.PresentedbyTheHonourableAudleyShawCD,MP.MinisterofFinanceandthePublicService.Topic:EquitableGrowth,FinanceandInstitutions.Sub–topic:De-RiskingandRemittancesintheCaribbean
• FATFGuidanceforaRisk-basedApproach,February2016.MoneyorValueTransferServices
• SWIFT,August2016.Addressingtheunintendedconsequencesofde-risking–FocusonAfrica
• FATFGuidance,October2016.CorrespondentBankingServices• FSB,December2016.FSBactionplantoassessandaddressthedeclinein
correspondentbanking-End-2016progressreportandnextsteps
References
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• WorldBank• October2015• SurveyonDe-RiskingActivitiesintheRemittanceMarket
References
• FATFGuidance• February2013• AML/CFTMeasuresandFinancialInclusion
• FSB• December2016• De-Risking• Causeforconcern
• SWIFT• August2016• Maymakebusinesssensefortheindividualbanks
• Widerconsequences
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Topics• Whatisderisking?• Whatishappening?• Deriskingexample
1.ConceptofDerisking
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WhatisDerisking?
Description• “Generallyspeaking,de-riskingreferstothephenomenonoffinancial
institutionsterminatingorrestrictingbusinessrelationshipswithclientsorcategoriesofclientstoavoid,ratherthanmanage,riskinlinewiththeFATF’srisk-basedapproach”FATF,2014
• “Situationswherefinancialinstitutionsterminateorrestrictbusinessrelationshipswithcategoriesofcustomers”– FATF,2015
Isallderiskingbad?• Goodderisking …..• Badderisking …..Perspectives• Countrylevel• Institutionlevel
DefinitionTomakesomethingsaferbyreducingthepossibilitythatsomethingbadwillhappenandthatmoneywillbelosthttp://dictionary.cambridge.org/us/dictionary/english/derisk
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WhatisHappening?
G20Survey,2015• The“de-risking”trendimpactsmoreMTOstodaythanafewyearsago
• Declineincorrespondentbankingrelationships
• TheMTOsbusinessmodelisoftenperceivedashighrisk.
• However,thesurvey“highlightsaratherlownumberofviolationsoftherelevantlegalrequirements”
ThemaindriversforMTOaccountclosureinclude:• Profitability• Pressurefromotheractors(correspondentbanks)andfearofregulatoryscrutiny
• LackofconfidenceintheMTOs’procedures• Reputationalrisk
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DesriskingExample
Somalia• Dependentonremittances• DiasporaremitsapproxUS$1.3billionto
Somalia(perannum)• MainlyviatheSomalimoneytransfer
operators (MTO)• Estimatedat25-45%ofSomaliGDP• Greaterthanalltheincomeitreceivesfrom
aid,foreigndirectinvestment,andexportscombined
• Countryrisk- High• OFAClist- al-Shababconcerns• Politicalrisk• Economicrisk• Crimerisk
• Bankclosedtheaccountsofmoneytransferorganizations(MTO)–2013/14
• Dahabshiil and a number of others
• MTOs outside the risk appetite
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Topics• Driversofderisking• FATFperspectives• R.1– Assessingrisksandapplyingarisk-basedapproach• R.10– Customerduediligence• R.13– Correspondentbanking• R.14– Moneyvaluetransferservices• R.15– Newtechnologies• R.16– Wiretransfers
2.ConsistencywithFATFStandards
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DriversofDerisking
FATFacknowledgementBrisbane,26June2015- Situationswherefinancialinstitutionsterminateorrestrictbusinessrelationshipswithcategoriesofcustomer(so-called“de-risking”)isacomplexissuethatgoesfarbeyondanti-moneylaundering(AML)andcounter-terroristfinancing(CFT).TheFATFhasgatheredpreliminaryinformationonthepotentialdriversof“de-risking”,withinputfromtheprivatesectorwhichhighlightsthatthereisacontinuedneedtoimprovetheevidencebase inordertodeterminethecauses,scaleandimpactofde-risking.TheFATFapproachto“de-risking”isbasedonthe FATFRecommendations whichrequirefinancialinstitutionstoidentify,assessandunderstandtheirmoneylaunderingandterroristfinancingrisks,andimplementAML/CFTmeasuresthatarecommensuratewiththerisksidentified.
Keyconcerns• Complexissuethatgoesfarbeyondanti-moneylaundering(AML)andcounter-
terroristfinancing(CFT)• Continuedneedtoimprovetheevidencebaseinordertodeterminethecauses,
scaleandimpactofde-risking• TheFATFapproachto“de-risking”isbasedonthe FATFRecommendations
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DriversofDerisking
FATFacknowledgement“De-riskingcanbetheresultofvariousdrivers,suchasconcernsaboutprofitability,prudentialrequirements,anxietyaftertheglobalfinancialcrisis,andreputationalrisk.Itisamisconceptiontocharacterisede-riskingexclusivelyasananti-moneylaunderingissue”- FATF,2014
Drivers• Profitability• Prudentialrequirements• Anxietyaftertheglobalfinancialcrisis• Reputationalrisk
Observation• Increasingunderstandingofderisking
http://www.fatf-gafi.org/publications/fatfrecommendations/documents/rba-and-de-risking.html
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FATFPerspectives
FATFpositioni.r.o.derisking“De-risking”shouldneverbeanexcuseforabanktoavoidimplementingarisk-basedapproach,inlinewiththeFATFstandards.TheFATFRecommendationsonlyrequirefinancialinstitutionstoterminatecustomerrelationships,onacase-by-casebasis,wherethemoneylaunderingandterroristfinancingriskscannotbemitigated.ThisisfullyinlinewithAML/CFTobjectives.WhatisnotinlinewiththeFATFstandardsisthewholesalecuttinglooseofentireclassesofcustomer,withouttakingintoaccount,seriouslyandcomprehensively,theirlevelofriskorriskmitigationmeasuresforindividualcustomerswithinaparticularsector.”
Considerations• Deriskingshouldneverbeanexcuse…..• Terminatecustomerrelationships
• Onacasebycasebasisonly- WhereML/TFcannotbemitigated• Seriouslyandcomprehensivelytakeintoaccountthelevelofriskorriskmitigation
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WhatRiskisBeingAddressed?
WhentheFATFtalksaboutrisk– whatrisk?• Regulatoryrisk• Compliancerisk• MLrisk• TFrisk
Whenyouconductduediligence,whatriskisbeingmitigated?• Asabaseline:
• “Don’tdobusinesswithsomeoneyoudonotknow”• ThisdoesnotnecessarilymitigateML/TFrisk
De-marketing• insomecases,bankswillexittherelationshipsolelyonthebasisofprofits
(“de-marketing”),irrespectiveoftheriskcontextandofmarketcircumstances
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R1.Assessingrisksandapplyingarisk-basedapproach–“Countriesshould”• Identify,assess,andunderstandMLandTFrisksforthecountry• Takeaction,includingdesignatinganauthorityormechanismtocoordinateactionstoassessrisks,andapplyresources,aimedatensuringtherisksaremitigatedeffectively
• Basedonthatassessment,countriesshouldapplyaRBAtoensurethatmeasurestopreventormitigateMLandTFarecommensuratewiththerisksidentified
• EssentialfoundationtoefficientallocationofresourcesacrosstheAML/CFTregimeandtheimplementationofrisk- basedmeasuresthroughouttheFATFRecommendations
• Wherecountriesidentifyhigherrisks,theyshouldensurethattheirAML/CFTregimeadequatelyaddressessuchrisks
• Wherecountriesidentifylowerrisks,theymaydecidetoallowsimplifiedmeasuresforsomeoftheFATFRecommendationsundercertainconditions
• RequireFisandDNFBPstoidentify,assessandtakeeffectiveactiontomitigateMLandTFrisks
Recommendation1
Perspectives• Country• InstitutionQuestions• Whatistheendgame?
• Whatdoessuccesslooklike?
• Istherealignment?
• Whatgovernanceinneeded?
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Recommendation10
Customerduediligence“Financialinstitutionsshouldbeprohibitedfromkeepinganonymousaccountsoraccountsinobviouslyfictitiousnames.Financialinstitutionsshouldberequiredtoundertakecustomerduediligence(CDD)measureswhen:(i) establishingbusinessrelations;(ii) carryingoutoccasionaltransactions:(i)abovethe
applicabledesignatedthreshold(USD/EUR15,000);or(ii)thatarewiretransfersinthecircumstancescoveredbytheInterpretiveNotetoRecommendation16;
(iii) thereisasuspicionofmoneylaunderingorterroristfinancing;or
(iv) thefinancialinstitutionhasdoubts abouttheveracityoradequacyofpreviouslyobtainedcustomeridentificationdata.”
• Whydidthishappen?• FATFstandardsarenotprescriptive
• Identificationandverification• Proportionateresponses• Wearewhereweare– Whatisthewayforward?
Inarulesapproach,typically:• Name• DateofBirth• IDNumber• Address• Contactnumber
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Recommendation13
Correspondentbanking“Financialinstitutionsshouldberequired,inrelationtocross-bordercorrespondentbankingandothersimilarrelationships,inadditiontoperformingnormalcustomerduediligencemeasures,to:(a) gathersufficientinformationaboutarespondentinstitutiontounderstand
fullythenatureoftherespondent’sbusinessandtodeterminefrompubliclyavailableinformationthereputationoftheinstitutionandthequalityofsupervision,includingwhetherithasbeensubjecttoamoneylaunderingorterroristfinancinginvestigationorregulatoryaction;
(b) assesstherespondentinstitution’sAML/CFT controls;
(c) obtainapprovalfromseniormanagementbeforeestablishingnewcorrespondentrelationships;
(d) clearlyunderstandtherespectiveresponsibilitiesofeachinstitution;and
(e) withrespectto“payable-throughaccounts”,besatisfiedthattherespondentbankhasconductedCDDonthecustomershavingdirectaccesstoaccountsofthecorrespondentbank,andthatitisabletoproviderelevantCDDinformationuponrequesttothecorrespondentbank.”
• NotrequireKYCC• Monitorrespondentinstitution’stransactions
• Respondentinstitution’sriskprofile
• RFIonanyparticulartransaction
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Recommendation14
MoneyValueTransferServices“Countriesshouldtakemeasurestoensurethatnaturalorlegalpersonsthatprovidemoneyorvaluetransferservices(MVTS)arelicensedorregistered,andsubjecttoeffectivesystemsformonitoringandensuringcompliance withtherelevantmeasurescalledforintheFATFRecommendations.CountriesshouldtakeactiontoidentifynaturalorlegalpersonsthatcarryoutMVTSwithoutalicenseorregistration,andtoapplyappropriatesanctions.Anynaturalorlegalpersonworkingasanagent shouldalsobelicensedorregisteredbyacompetentauthority,ortheMVTSprovidershouldmaintainacurrentlistofitsagentsaccessiblebycompetentauthoritiesinthecountriesinwhichtheMVTSprovideranditsagentsoperate.CountriesshouldtakemeasurestoensurethatMVTSprovidersthatuseagentsincludethemintheirAML/CFTprogrammes andmonitorthemforcompliancewiththeseprogrammes.”
• Supervisors shouldclarifyexpectations–managementofrisk
• Avoidoverlyconservativecompliance
• ProvidesexamplesofCDDpractices
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Recommendation15
Newtechnologies“Countriesandfinancialinstitutionsshouldidentifyandassessthemoneylaunderingorterroristfinancingrisksthatmayariseinrelationto(a)thedevelopment ofnewproductsandnewbusinesspractices,includingnewdeliverymechanisms,and(b)theuse ofnewordevelopingtechnologiesforbothnewandpre-existingproducts.Inthecaseoffinancialinstitutions,suchariskassessmentshouldtakeplacepriortothelaunchofthenewproducts,businesspracticesortheuseofnewordevelopingtechnologies.Theyshouldtakeappropriatemeasurestomanageandmitigate thoserisks.”
Perspectives• Firstly,opportunitiestomisusetechnologiesforML/TF.
• Ontheotherhand,technologiesprovideopportunitiesforimprovedAML/CFTresponses:• Fintech• Regtech
• Whatquestionisbeingansweredi.r.o.AML/CFT?
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Recommendation16
Wiretransfers“Countriesshouldensurethatfinancialinstitutionsincluderequiredandaccurateoriginator information,andrequiredbeneficiary information,onwiretransfersandrelatedmessages,andthattheinformationremainswiththewiretransferorrelatedmessage throughoutthepaymentchain.Countriesshouldensurethatfinancialinstitutionsmonitorwiretransfersforthepurposeofdetectingthosewhichlackrequiredoriginatorand/orbeneficiaryinformation,andtakeappropriatemeasures.Countriesshouldensurethat,inthecontextofprocessingwiretransfers,financialinstitutionstakefreezingactionandshouldprohibitconductingtransactions withdesignatedpersonsandentities,aspertheobligationssetoutintherelevantUnitedNationsSecurityCouncilresolutions,suchasresolution1267(1999)anditssuccessorresolutions,andresolution1373(2001),relatingtothepreventionandsuppressionofterrorismandterroristfinancing.”
Parties• Originator• OrderingInstitution• IntermediaryInstitution• BeneficiaryInstitution• Beneficiary/Payee
FATFguidance• TFrisks• WhatriskappetiteforTF?
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Topics• Deriskingresearch• Levelofunderstandingofderisking• Graduatedapproach• Riskappetite• Identityandidentification• Costofcompliance
3.WhySomeFIsDe-risk
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DesriskingResearch
DowJones&ACAMS- GlobalAnti-moneyLaunderingSurveyResults2016Haveexited40% ofrespondentsreporttheircompanieshaveexitedafullbusinesslineorsegment ofbusinessinthepast12monthsduetoperceivedregulatoryriskand/ortheorganization’sinabilitytomanagetherisk- Increasefrom2015
PlanningtoexitAboutone-thirdofrespondentsclaimtheircompaniesareplanningtoexitand/orareinvestigatingthepossibilityofexitingabusinesslineorsegment inthenext12monthsduetoregulatoryrisk
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DesriskingResearch
TypesofSegmentsConsideringExiting %
Industriesthathavebeendesignatedhigh-riskbygovernmentagencies 51%
Specificproducts/productlines 45%
Specificgeographicarea(s) 40%
Non-governmentalorganizations(NGOs)orcharities 14%
Other 8%
ReasonsConsideringExitingSegment- 2016 %
Segmentnolongerwithinorganization’sriskappetite 56%
Costofcompliancemakessegmentunprofitable 51%
Segmentdrawsexcessiveregulatoryoversight 40%
Noconfidenceregulatorswillapproveriskmanagementapproach 20%
Segmentisgenerallyunprofitable 18%
Other 1%
Source: Dow Jones & ACAMS
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LevelofUnderstanding?
Howwelldoregulatorsunderstandthedrivers• Profitabilityconsiderations• Reputationalandliabilityrisks• Changesinbanks’financialriskappetites• Theamountoffinancialpenaltiesimposedby
supervisoryandlawenforcementauthorities• Increasedcompliancecostsassociatedwith
implementingconflictingregulatoryrequirements,includingAML/CFT
• ConfusioncausedbythetermKYCC• Complexity,numberandchangesinsanctions
regimes,andalsouncertaintyrelatedtotheinterplayofdifferentsanctionsregimesandtheirapplicabilitytofinancialinstitutions
Questions:1.HowwelldoAML/CFTstakeholdersunderstandthedriversofderisking?
2.WhatisneededtoavoidunintendedconsequencesofAML/CFTrequirementsinfuture?
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GraduatedApproach
Questions:1. Whatarethemostsignificant
capacitybuildingopportunitiesi.r.o.AML/CFTframeworks?
2.WhereshouldthefocusbeinrespectofthesupervisionofAML/CFTrequirements?
3. WhatregionalsupportisneededinrespectofthedevelopmentofinstitutionalRBAs?
4.Whatregionalsupportisneededtopromotefinancialinclusionandimprovetheprospectsforfinancialintegrity?
DraftRBAGuidance- PublishedJune2017(SA)Higherrisk• Enhancedduediligence• Wheretheriskofabuseisassessedtobehigher• Systemsandcontrolsshouldprovidefor:
• More information tobeobtainedaboutclients• More secureconfirmationofclients’informationtobeapplied
• Closer scrutiny tobeconductedtotheirclients’transactionactivities
Lowerrisk• Simplifiedduediligence• Wheretheriskofabuseisassessedtobelower• Systemsandcontrolsmayallowfor:
• Less information tobeobtained• Less secureconfirmationofinformationtobeapplied• Less frequentscrutinytobeconducted
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RiskAppetite
Addressriskappetiteconsiderations• IndeterminingthedesiredoutcomesofanNRA
andRBA,countries insub-SaharanAfricashouldconsidertheirriskappetite
• Riskcannotbeeliminatedcompletely
• Thisisnotspecifically/comprehensivelyaddressedinFATFrecommendationsorguidancethathasbeenpublishedbytheFATF
• Therewouldbevalueindevelopingaregionalconversation
• Institutionswilldeterminetheirriskappetiteaspartoftheirriskmanagementframeworkandprocess,i.e.relatingtocompliance,ML/TFandotherrisks
• Arobustunderstandingofthedynamicsrelatingtheretowillassistinavoidingso-calledde-risking
Source:FSDA
COSO“…theamountofrisk,onabroadlevel,anorganisationiswillingtoacceptinpursuitofvalue."KingIII“Thelevelofresidualriskthecompanyispreparedorwillingtoacceptwithoutfurthermitigationactionbeingputinplace,ortheamountofriskthecompanyiswillingtoacceptinpursuitofvalue.”
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RiskAppetite
Zerotolerance• Draftguidance– para56
“Therisk-basedapproachisnota“zerofailure”approachastheremaybeoccasionswhereaninstitutionhastakenallreasonablemeasurestoidentifyandmitigateML/TFrisks,butitisstillexploitedformoneylaunderingorterroristfinancingpurposes.”
• Howfarhavewecomewiththis?• Yougetthesensethatitispossiblethattherecould,
acrossmorestakeholders,beasharedvisionofsuccess
• However,thisisnotalineardebate– Itscomplex• Thereisaninterrelationshipbetweencompliance
riskandML/TFrisk
Source:FSDASettingof• Riskappetite• Risktolerances
Governance• Strategy• Structure• Ethics• Culture
Roles&responsibilities• Board• Management• Compliance• Risk• Audit
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IdentityandIdentification
IdentityIdentitycanbedeterminedbyreferencetoanumberofcharacteristics- Attheverybasiclevel,thesecharacteristicsaretheperson’s:
• fullnames,• dateofbirthand,• inmostcases,auniqueidentifyingnumberissuedbya
governmentsource.
Informationaboutanaturalperson’sidentitymaybesupplementedbyapplyingothercharacteristicsofanaturalpersonincluding:
• his/herphysicalappearanceorotherbiometricinformation,
• placeofbirth,• familycircumstances,• placeofemploymentorbusiness,• residentialaddress,• contactparticulars(e.g.telephonenumbers,e-mail
addresses,socialmedia),• contactswiththeauthorities(e.g.taxnumbers)orwith
otheraccountableinstitutions.
DraftRBAGuidance- PublishedJune2017(SA)
DateofBirth
Name
IDNumber
PhysicalAppearance
FamilyCircumstances
ResidentialAddress
PlaceofEmployment
PlaceofBirth
ContactParticulars
ContactswithAuthorities
Other characteristics of a natural person
Basic characteristics of a natural person
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CostofCompliance
Developingunderstandingofcosts“Thereasonswehaveheardfortherestrictionorterminationofcorrespondentbankingrelationshipsaremixed.Thepredominantonepointstothehighcostofcompliance forglobalcorrespondentbanksstemmingfromheightenedanti-moneylaunderingandcounterfinancingofterrorism(AML/CFT)requirements.Thecorrespondentbankssaythiscostofcompliancedwarfsthebusinessreturns fromsmallerterritories,particularlyiftheyareclassifiedashighriskclientsandproducts.Inthiscontext,correspondentbanksareapprehensiveaboutdoingbusinesswithmoneytransferoperatorsandremittancecompanies.”Source:IMF/WorldBank2016AnnualMeetingsSmallStatesFormSpeech
Questions:
1.Whatarethecosts?2.Whyistherenotmoreempiricaldatarelatingtocosts?
3.Whatarethecostdrivers?
4.Howdoyoudeveloptheunderstandingofcosts?
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CostofCompliance
Doinstitutionshavecapacity?• Systems
• Legacysystems• Singleviewofcustomer• Clientrelationshipsvssingletransactions• CDDandriskdata• Monitoring
• Newriskprocesses• ML/TFriskassessment• Processvsevent
• Riskmanagementknowledge,skillsandexperience• Firstlineofdefence– riskowner• Secondlineofdefence– support• Thirdlineofdefence– assurance
Source:FinMarkTrust,2016
ProjectApproach
Costcategorised• Systems• Processes• People• OtherTypesofcost• Fixedvsvariable• UpfrontvsongoingStakeholderengagement• Data• Modelling
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Topics• Escaperoute?
4.IsDeriskinganEscapeRoute?
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Youhavetoask- Escaperoutefromwhat?• Businessrisk• Productrisk• Deliverychannelrisk• Clientrisk• Geographyrisk
Escapefrompastsins?• Duediligence• Reporting• Recordkeeping• Training• Monitoring
EscapeRoute?
Isderiskinganescaperoute?• Yes• No
Perspectives• Country• Institution
Riskresponses• Transfer• Tolerate• Treat• Terminate
WhywasderiskingasurprisetoAML/CFTstakeholders?
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Topics• Keyissues• Wayforward
5.ImplicationsforAML/CFT
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KeyIssues
AsrecognisedbyFATFIntroduceriskandopacity:• Intotheglobalfinancialsystem• Terminationofaccountrelationshipshasthepotential
toforceentities/personsintolessregulatedorunregulatedchannels
• Movingfundsthroughregulated,traceablechannelsfacilitatestheimplementationofAML/CFTmeasures
Financialinclusion:• ItiscentraltotheFATFmandatetoensurethatthe
globalAML/CFTstandardiswellunderstoodandaccuratelyimplemented
• CountriesandtheirfinancialinstitutionsshouldbeprovidedwithsupportindesigningAML/CFTmeasuresthatmeetthegoaloffinancialinclusion
“ThisisaseriousconcernfortheFATFandtheFATF-style regionalbodies(FSRBs)totheextentthatde-riskingmaydrivefinancialtransactionsintoless/non-regulatedchannels,reducingtransparencyoffinancialflowsandcreatingfinancialexclusion,therebyincreasingexposuretomoneylaunderingandterroristfinancing(ML/TF)risks.”
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WayForward
Whatistheendgame?• Whatdoessuccesslooklike?• Istherealignment?• Whatgovernanceinneeded?• WhoshoulddevelopML/TFriskstandards?• Whatmitigatescomplianceriskandbyhowmuch?• WhatmitigatesMLriskandbyhowmuch?• WhatmitigatesTFriskandbyhowmuch?• Isahighriskappetitebad?• Whatarethemeasuresofsuccess?
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Thank You
Governance, Risk, ComplianceJohn Symington
Contact: Lucy [email protected]+27 11 463 5769