20141002 aml cft presentation vectis ams cdds

20141002 aml cft presentation vectis ams cdds

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  ANTI-MONEY LAUNDERING / COUNTERTERRORIST FINANCING RISK Breakfast session CDDS-AMSFinsoft Thursday oct. 2nd 2014
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  2 Since 2005 12 people Applicationfiles Compliance and execution Governance advisory Internal audit (e)trainings 85 application files 100 yearly clients Market: 320 PFS 155 banks
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  3 4.000.000 €
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  4 Indicators - Large scalecash transaction - Rapid off-shore transfer after fund deposit - Unrealistic wealth compared to clients profile 1.000.000.000 €
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  WHAT DO IHAVE TO DO WITH TOM ? 5 Open files: 1587 Deposit of suspicions: 1332 Proven offences: 471 87 % Banks 4 % for the others PSFs
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  AML/CTF : QUICKREMINDER 6 - Counterfeit money ( 101 ) - Forgery and use of forgeries ( 100 ); - Fraud (bankruptcy, misuse of corporate assets) (81); - Drug trafficking ( 21 ); - Corruption ( 16 ); - Theft (15 ); - Crime and offences within the a criminal organization framework ( 14 ); - Arms dealing ( 7 ); - Forgery and the hacking of products ( 4 ); - Abuse of market and insider trading ( 3 ); “Primary offence” “dirty” money Legal transaction “LAUNDERED” MONEY
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  7 International legislation: - 40+ 9 GAFI recommendations - Directive 2005 / 60 / CE of October 26th, 2005 relative to the prevention of the financial system misuse for money laundering and of the terrorism financing purposes (“3rd anti-laundering directive”) The Luxembourg legislation: (base law) Law of 12 November 2004 as amended on the fight against money laundering and terrorist financing The circulars issued by the authorities (CRF, CSSF, etc.) Circular CSSF 11/529 Risk analysis regarding the fight against money laundering and terrorist financing (AML/CTF) Circular CSSF 12/552 as amended by Circular CSSF 13/563 Re: Central administration, internal governance and risk management CSSF Regulation N°12-02 of 14 December 2012 on the fight against money laundering and terrorist financing Circular CSSF 13/556 : Entry into force of CSSF Regulation N° 12-02 of 14 December 2012 on the fight against money laundering and terrorist financing - repeal of Circulars CSSF 08/387 and CSSF 10/476 (SORRY FOR THIS)
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  8 AML/CFT 12/02 Chap 3: Risk Based Approach Chap 4 : Vigilance Chap 5 : Internal organization Chap 6 : Cooperation with authorities The professional has to: 1. Identify and assess risks 2. Classify all customers according to different risk levels 3. Assess the risk before accepting the customer 4. Adapt his assessment according to any significant modification 5. communicate information on their risks assessment with the CSSF
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  9 AML/CFT 12/02 Chap 3: Risk Based Approach Chap 4 : Vigilance Chap 5 : Internal organization Chap 6 : Cooperation Section 1: Acceptance of a new customer Section 2: Moment of identification and identity check Section 3: identification measures of customers Section 4: identity check towards agents of the customers Section 5: identity check towards actual beneficiaries Section 6: information on the object and the nature of the business relationship Section 7: Obligation of documents preservation and information Section 8: Obligation of strengthened vigilance towards customers Section 9: The constant vigilance Section 10: Execution of vigilance by third parties
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  10 AML/CFT 12/02 Chap 3: Risk Based Approach Chap 4 : Vigilance Chap 5 : Internal organization Chap 6 : Cooperation Section 1: Acceptance of a new customer Section 2: Moment of identification and identity check Section 3: identification measures of customers Section 4: identity check towards agents of the customers Section 5: identity check towards actual beneficiaries Section 6: information on the object and the nature of the business relationship Section 7: Obligation of documents preservation and information Section 8: Obligation of strengthened vigilance towards customers Section 9: The constant vigilance Section 10: Execution of vigilance by third parties
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  11 AML/CFT 12/02 Chap 3: Risk Based Approach Chap 4 : Vigilance Chap 5 : Internal organization Chap 6 : Cooperation with authorities Board of Directors The AML/CFT policy must cover all professional obligations and notably include: - Policy of acceptance of customers - Procedures with regard to the identification, the supervision, the management and the mitigation of AML/CFT risks - Acceptance and follow-up procedures of business relationships (third parties) - Procedures to follow-up in case of suspicion - Training program for staff awareness - Definition of respective responsibilities
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  12 AML/CFT 12/02 Chap 3: Risk Based Approach Chap 4 : Vigilance Chap 5 : Internal organization Chap 6 : Cooperation with authorities ALM/CFT Responsible Direction level Have to be communicated to the CSSF Experienced, master knowledge of the Luxemburg legal framework regarding AML/CFT, and be empowered within the organization Checks the respect for the professional obligations applicable Sets up the training program and raise awareness of the staff Applies the AML/CFT policy Is privileged contact of competent authorities regarding AML/CFT Handles the transmission of any information or statement with the authorities Regularly reports in writing, and make at least once a year a summary on its activities and its functioning
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  13 AML/CFT 12/02 Chap 3: Risk Based Approach Chap 4 : Vigilance Chap 5 : Internal organization Chap 6 : Cooperation with authorities Audit The control of the AML/CFT policy is an integral part of missions of the internal audit. The analytical report of the auditor has to contain : - The description of the AML/CFT policy, the check of its compliance - The appreciation of the analysis - A statement on the realization of a regular control ; - The check of the training and awareness measures of the employees - A statistical history of the detected suspicious transactions
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  DID I LOSEYOU ? Is guilty the one who - commits deliberately an act of money laundering - bring his/her help to an act of money laundering - acquires, holds or uses the goods coming the direct or indirect product of the primary offence • Prison sentences (1 to 5 the years) and/or fines (1.250 to 1.250.000 euros) for the (co-)authors and the accomplices. In case of recurrence the sanctions can be doubled. • The violation of the obligations of the professional resulting from the circular is also punished even in the absence of laundering or of terrorism 14
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  PRACTICALLY : THE SUMMARIZEDCHECK LIST 1. Define / get to know the AML policy & risk management 2. Identification Identify > Sales / account manager Risk analysis > AML Officer What degree of vigilance? > AML Officer Customer acceptation > Management 3. Ongoing follow-up of the customers Update of the identification and if change revise the risk analysis and degree of vigilance and to judge the pursuit of the relationship. 4. If suspicion of laundering Write an elaborate report in the AML Officer Assessment > AML Officer If validated > CRF and CSSF Take opinion and possibly stop the relationship 15
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  SUPERVISORY SYSTEM The professionals arerequired to have procedures and mechanisms of control allowing them, during the customers acceptance and the business relationships It 1) Covers all customers accounts and their transactions 2) Is automatized, excepted if volume and nature don’t require such automation. 3) Supports creation of written reports 4) Initial validation and regular control made by the responsible of the AML/CFT control in order to adapt it 16 (CSSF regulation n°12-02 - Chapter 5: Section 2)
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