How to Spot, Manage and Prevent Money Laundering

This training course teaches you how to implement systems to combat money laundering and terrorist financing.

Course Overview

All financial institutions are legally obliged to implement systems to combat money laundering and terrorist financing. At the same time, Auditors must ensure that the spirit and letter of the law is being strictly implemented.In this high Impact program, we pick in-depth review on Essential and Practical Guide to this New Challenges.

Course Agenda Highlights

The Fundamentals of Money Laundering
Anti money laundering (AML) and counter financing of terrorism (CFT)
Global compliance issues
Recommendations 2012
Definition and objectives of KYC
KYC standards and regulatory requirements
Application of KYC
Procedure for customer identification
Specific identification issues
Adopting a risk based approach
Constructing the AML and KYC framework
Implementing and managing the total KYC
Real life case-studies of KYC management
KYC failures and success
Basics of Clearing & Settlement Systems
FATF and Fraud case studies
Mimicking Legitimate Transactions- Intl offshore centre’s
Standard Import/Export Techniques in Trade Finance
The International Legislations and Best Practices
Corporate Misuse and Breaches of trust in detail
Assessing the State of Legislation and Best Practices in a Cost Effective Manner
The law in major international offshore centers-core issues of concern
Case studies (continued)-Corporate Misuse and offshore centre’s
Applying the rules and regulations as to: Asset protection trusts
Enforcement, Freezing, Forfeiture and the Teeth of Anti-Fraud programmes
Red flags or warning signs of money laundering
Issues of international banking (documentary credits) law
Case Study: Electronic payment system issues in money laundering- latest techniques and concerns

Who Should Attend?

• Compliance team
• Operations staff
• Risk management team
• Heads of legal department
• Money Laundering Reporting Officers
• MLROs
• Company Directors
• In-house legal and compliance personnel
• Legal affairs directors and managers
• Company Secretaries
• Financial Controllers
• Fraud Investigators
• Heads of Accounting
• Finance Directors
• Heads of Procurement
• Risk Managers
• Operational Risk personnel
• Marketing/hospitality personnel
• Heads of Internal Audit/Internal Auditors/Accountants
• External Auditors team

Program Content;

The Fundamentals of Money Laundering
• Size and scope
• The UN's ten laws on dealing with money laundering
• The impact of globalization
• The approach of the US and the UK
• The Asian response
• The Middle Eastern response
• The European response

Anti money laundering (AML) and counter financing of terrorism (CFT)
– Origin and definitions
– Latest issues globally
– Risks and impact on banks and the financial services industry
– Risks and impact on other industry sectors within the Regulated Sector
– Placement, layering and integration techniques

Global compliance issues
– The FATF and its regional groups
– The “40 + 9” Recommendations
– The new revised FATF

Recommendations 2012
– Globalisation and the need for international regulation and cooperation
– Inter-relationship with Anti Bribery & other anti financial crime compliance

Definition and objectives of KYC
– The history of the KYC requirement
– Definition of a customer/client
– Developing the customer’s transaction profile
– Importance and rationale of KYC

KYC standards and regulatory requirements
– The legal and regulatory framework
– Compliance programme
– Customer acceptance policy
– Customer identification and verification
– General identification requirements
– The role of:
– Supervisors and managers
– Auditors
– Senior management and directors

Application of KYC
– The AML policy, guidelines and manual
– Guidelines for opening accounts and establishing relationships
– Conducting Customer Due Diligence (CDD)
– Conducting Enhanced Due Diligence (EDD)
– Changes in relation to beneficial ownership

Procedure for customer identification
– Identification procedure at different stages
– Establishing banking relationship
– When carrying out a financial transaction
– Customer research and verification
– When bank doubts authenticity or veracity or the adequacy of previously obtained customer identification data
– Proof of identity – Establishing identity and establishing present residential address
– Developing the customer’s profile
– KYC for existing account-holders
– Confidentiality of information collected under KYC

Specific identification issues
– Minor accounts
– Trust, nominee and fiduciary accounts
– Joint accounts
– Corporate vehicles such as Special Purpose Vehicles (SPVs)
– Introduced business
– Client accounts opened by professional intermediaries
– Politically exposed persons (PEPs)
– Beneficial Ownership
– Non face-to-face customers (example, through internet and electronic banking)

Adopting a risk based approach
– Requirements under the legal framework
– Impact of the new 2012 FATF Recommendations
– Assessing vulnerabilities and risk
– Full KYC vs. Risk-based KYC
– Why and when to conduct CDD and EDD
– When to implement reduced KYC requirements
– Reliance on KYC done by third parties, agents or intermediaries

Constructing the AML and KYC framework
– Group policies
– Risk assessments
– Roles and responsibilities
– The MLRO
– Requirement of integrity of all employees
– Training and awareness
– Monitoring and record keeping
– Reporting requirements – Threshold reporting and Suspicious Transaction Reporting (STR) or “SARs”
– Dealing with the authorities and enforcement agencies
– Audit
– Role of HR, training, risk, IT and other critical departments
– Management Information (MI) and oversight

Implementing and managing the total KYC
– Evaluation of employees in ensuring integrity
– Due diligence
– Record keeping
– On-going training
– Monitoring
- Reporting

Real life case-studies of KYC management
– KYC failures and success
– Ways to prevent such failures
– Tips for successful implementation
– Meeting expectations
Basics of Clearing & Settlement Systems
• Banking law
• How clearing works
• How settlement works
• The workings of electronic banking

FATF and Fraud case studies
• How to money launder: the core methodologies -
• Understanding the criminal mind (Egmont and FATF issues)
• 40 Recommendations, 9 Special recommendations, 2012
• amendments, Mutual reviews, Non-co-operative countries

Mimicking Legitimate Transactions- Intl offshore centres

• Recent issues of concern: HSBC and other banks caught up in
• the public cross-fire
• Finding a lawyer or trustee
• Setting up an asset Protection trust
• Setting up an international business corporation - Beneficial
• vs. nominees ownership rules and the BVI
• destination
• Bermuda vs. Bahamas and other offshore centres

Standard Import/Export Techniques in Trade Finance
• Other Businesses and the Use of Non-cash Instruments
• Online gambling
• Detection difficulties and compliance headaches Bank Secrecy
• and Data Protection: Fraud and Financial Crime Exposed
• Limits to the law enforcement
• Challenges to compliance
• Electronic systems
• Management information systems

The International Legislations and Best Practices
• Setting up a business with certain legitimate interests
• Standard Import/Export Techniques in Trade Finance as applied

Case Study- Trade based Money Laundering

The new revised UK approach and the JSMLG Guidance
• UK laws-Proceeds of Crime Act 2002
• Serious Organised Crime and Police Act
• Terrorism Act 2000
• Serious Crime Act 2007
• Counter Terrorism Act 2008
• Money Laundering Regulations 2007
• Financial Services Authority Rules
• Rules of other regulators

The EU and the 3rd Money Laundering Directive; Possible 4th Directive; Technology and Data protection in detail

• Interpol and Europol

The US approach to prevention and to compliance
• The Patriot Act
• The Anti-Hawala Networks
• FINCEN
• OFAC
• MOU's to offshore centers
• Offshore banking supervisors
• Intelligence agencies and MOU's

Corporate Misuse and Breaches of trust in detail
• How they are set up
• Special rules for hedge funds
• Private equity funds
• The role of funds administrators and trustees
• Liability of various parties and knowledge
• Banks liability-when triggered
• New disclosure rules for proprietary trading

Case study: Offshore based money laundering and corporate misuse

Assessing the State of Legislation and Best Practices in a Cost Effective Manner -core issues of concern

The law in major international offshore centers-core issues of concern
• BVI
• Switzerland
• Cayman Islands
• Cyprus, DIFC
• Bermud
• Jersey, Guernsey

Case studies (continued)-Corporate Misuse and offshore centres

Applying the rules and regulations as to: Asset protection trusts
• Hedge funds-disclosure rules- USA , UK , Europe , etc
• Asset dumping schemes
• Liability-Constructive and Actual knowledge and in light of
• important cases-Bear Stearns

Enforcement, Freezing, Forfeiture and the Teeth of Anti-Fraud programmes
• Materiality
• As a payment exception in letters of credit, guarantees, etc
• In securities, negotiable instruments and other matters
• The concept of fraud
• Freezing and forfeiture of assets
• Issues related to cheques, drafts and other payments
• Credit card payments, loaded cards and debit cards

Red flags or warning signs of money laundering
Issues of international banking (documentary credits) law
Case Study: Electronic payment system issues in money laundering- latest techniques and concerns
• Working checklist from delegate and listed best practices
• In an international situation how to detect money laundering,
• freeze assets and use the forfeiture process - Will Asia become a new centre for money laundering as USA/Europe tightens up?
• The sensible way forward for emerging markets

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