Customer Due Diligence Masterclass

Participants will develop a greater appreciation and understanding of the:

• International legal and regulatory framework within which customer due diligence is required to be conducted
• Incorporation of that framework into local laws and customer risk management practices
• Specific high-risk customer, product, geographic and business threats and challenges
• Framework for corporate risk-based assessment required for a holistic approach to managing money laundering, tax evasion and terrorist financing risks
• Importance of customer due diligence process in deterring, detecting and protecting against financial crime risks
• Importance of the governance, internal control and culture in managing financial crime risks
• Escalation and ongoing threat management procedures in managing financial crime risks

Opening Exercise: You Are the Money Launderer

Introduction

• Customer due diligence Money Laundering
• Terrorist Financing
• Tax Evasion
• Linkages to Sanctions Evasion
• Scope & Scale of Financial Crimes
• Fines & Penalties
• Reputational Risk

Legal & Regulatory Framework

• UNSC Resolutions
• UN Conventions
• Financial Action Task Force (FATF)
• Egmont Group
• EU Directives
• Wolfsberg Group
• Joint Money Laundering Steering Group (JMLSG)
• FinCEN & USA Patriot Act
• Case Study: ABLV Bank

National Adoption of International Framework (UK)

• Proceeds of Crime Act 2002
• Money Laundering Regulations 2017
• Criminal Finances Act 2017
• Money Laundering Regulations 2019
• The Importance of 6MLD
• Relevant or Obliged Entities
• Group Exercise: The Billion Dollar Investment Opportunity

Corporate Risk-Based Assessments

• Customers
• Products & Services
• Geographic Locations
• Transactions
• Delivery Channels
• Size, Nature & Complexity of Business
• Case Study: Standard Chartered Bank

Risk Mitigation & Management in client due diligence process

• Business Strategic
• Governance
• Organisational Culture & Importance of 3 Lines of Defence (3LOD)
• Policies & Procedures
• Risk Management
• Internal Controls
• Specific Products & Services
• Record Keeping
• Training
• Communications
• Reporting
• Customer Due Diligence/ client due diligence
• Exercise: Communicating Change in AML Policy

Customer Due Diligence (CDD)

• When Is CDD due diligence necessary?
• The CDD Process
• Identification & Verification (ID & V)

• Screening
• Individuals
• Corporate Beneficial Owners & Controllers
• Corporates

• Know Your Customer (KYC)

• Purpose of Relationship
• Source of Funds
• Source of Wealth
• Nature of Business

• Enhanced Due Diligence (EDD)
• Ongoing Due Diligence
• Risk Approval Framework
• Customer Risk Model & Rating
• Simplified Due Diligence
• Case Study: Danske Bank Estonia

Specific CDD Guideline and requirements

• Non-Face to Face Customers & Digital IDs
• Trust and Fiduciary Accounts
• Nominees
• Bearer Shares
• Corporate Vehicles
• Associates, Introducers & Intermediaries
• Shell Companies or Banks
• Group Exercise: Is There a UBO?

Obligation to Perform EDD

• High Risk of Money Laundering & Terrorist Financing

• Charities
• Casinos & Gaming Entities
• Military & Defence
• State Owned-Entities

• Corporate Vehicles
• High Risk Third Country
• PEPs and PEP Associates
• Correspondent Relationships

• Payment Transparency

• Trade Finance

• TBML

• Transactions with no Apparent Economic & Legal Purpose
• Money Service Businesses &TPPPs

• Transaction Laundering

• New Technologies

• Crypto Currencies

• Regulatory Advisories
• Business Email Scams

• Expensive Watches

• Designated Non-Financial Businesses & Professions (DNFPBs)
• Case Study: Deutsche Bank Mirror Trades
• Case Study: Latvian Banks
• Case Study: The London Property Boom

Customer Risk Management

• Transaction Monitoring
• Negative News Screening
• Escalation Procedures
• Unusual Activity
• Suspicious Activity Reports (SAR)
• Suspicious Transaction and Order Reports (STOR)
• Can we Issue a SAR as well as a STOR?
• Tipping Off
• Exit Management
• Reputational Risk Management
• Whistleblowing
• Case Study: TD Bank

The trainer is an investment banking governance, audit, risk and compliance specialist who has extensive international experience. He holds an MBA from the CASS Business School, London and is a Chartered Certified Accountant.

He worked for Price Waterhouse in Kingston, Jamaica before arriving in London just after the Big Bang in 1986 and subsequently worked for several major institutions, including Manufacturers Hanover Trust, Continental Bank, CIBC and ABN AMRO. His roles have included internal audit, product control, risk management and SOX.

In addition to gaining experience in the major global financial centres, the above roles covered all aspects of regulation, governance and internal controls over the origination, sales and trading of a broad range of investment banking and capital market products. These products include: credit trading and credit derivatives; asset securitisation and structured finance; foreign exchange and foreign exchange options; interest rate derivatives; commodities and treasury.

He has also served as a business manager, where he played a leading role in the development and implementation of major strategic initiatives within global banking and markets. This was followed by the delivery of a training and cultural change programme in alignment with that strategy, across 50 countries.

The customer due diligence course trainer currently focuses on delivering CDD financial crime courses for major banks (HSBC, Soc Gen, RBS, Lloyds, Nordea and Handelsbanken) covering CDD AML compliance, Sanctions, Tax Evasion, Terrorist Financing Bribery & Corruption, as well as their related governance aspects. This delivery encompassed frontline staff and senior managers across global, private, corporate and retail banking in the UK, Europe, Asia, Middle East, Africa, US and the Americas.

He has also run train the trainer (TTT) courses and presented in front of US regulators. In addition, he delivers training programmes in Audit, Operational Risk, Treasury, Basel III, Liquidity Management, Capital Management and the Internal Capital Adequacy Assessment Process (ICAAP).

The customer due diligence training course is designed to ensure that financial crime risk professionals acquire the knowledge necessary to efficiently and effectively manage money laundering, tax evasion and financial crime risks within their organisations. The course focuses on those topics and specific aspects of governance and internal controls, identified by international and local regulatory bodies. The customer due diligence course draws on the trainer’s extensive experience working with and delivering courses for a wide range of financial institutions. As such, it will be both practical and interactive and should be of interest to compliance, finance and risk professionals in financial institutions and other relevant entities.