Essential AML/FCC Escalation & Suspicion Reporting Workshop

• Understand the purpose of an effective escalation process
• Appreciate the importance of a risk-based approach
• Understand that escalation is part only of a successful process, albeit a critical one
• Recognise what an effective process should look like
• Understand when to escalate and the various options available
• Be able to balance the need for more information against the risk of tipping off
• Gain an understanding of the financial crime life cycle in action
• Realise what happens to escalations and how they are managed
• Understand the personal liability that attaches to the process

Introduction

• The three stages of money laundering
• The three lines of defence model
• Customer due diligence
• KYC, CDD, EDD & DDD
• High-risk customers
• Sanctions

Risk-Based Approach

• Risk assessment methodology
• Risk categories – standard, medium, high
• Key controls
  • Sign off
  • Intensity of CDD
  • Review frequency
  • Transaction monitoring
• The financial crime lifecycle
• The 3 lines of defence working as a team
• Case study/Example

Escalation Process – The initial alert

• Who generates alerts & why
• What should prompt an alert
  • Doesn’t make sense
  • Doesn’t fit our knowledge of the client
  • Doesn’t fit in with normal business activity
  • You have a bad feeling/misgiving
• First-line alerts
• Second-line alerts
• Sanction alerts
• Alert options
  • Accept
  • Seek more information
  • Escalate immediately
• The importance of getting more information where applicable
• Balancing the risk of tipping off with information gathering
• Case Study/Example

Escalation Process

• SAR’s or an internal intermediate stage – the pros and cons
• Methods of escalation
  • Direct to MLRO
  • Via line manager
  • Via a confidential email
  • Whistleblowing
• Essential SAR information
  • Date
  • Details
  • Doubts
  • Decision
• What does the MLRO do with alerts?
• When must we involve specialist sanctions colleagues?
• Deciding to escalate to the NCA
• Time limits for escalation
• Personal and potentially criminal liability of all parties
• What happens once an SAR has been raised
• What happens next
• The mitigation process
• The exit process
• Case study/Example

Other Key Issues

• Staff training – must be risk-based
• Creating a holistic not process-based regime
• Embedding escalation into “business as usual” processes
• False positives
• Ensuring the level of escalations are appropriate to the profile of the business
• The role of internal audit
• The MLRO report
• Checking it all works well
• Senior and top management oversight
• Case study/Example

Course Conclusion

• Wrap up
• Summary
• Open Forum

The trainer had a highly successful, long and varied “fast track” career in Lloyds Bank which led him to a very senior management position in the bank’s private banking and wealth management division at an early age. He was then “head hunted” to join a merchant bank to head the risk function at main board director level. He now has over 40 years’ experience in the UK banking and financial services sector.

He has been a freelance Compliance, FCC & AML training consultant since retiring and is currently an external Master Trainer at both HSBC and Bank of China. At HSBC he has been a leading member of their global FCC & AML training programme which is now entering its sixth year. He has created and delivered training to a vast range of clients, from global giants to small firms and partnerships. He is an accomplished global trainer and has delivered extensive programmes in the UK, USA, South America, Europe, Africa, Asia and the Middle East.

The trainer is a highly adaptive, hands-on and highly sought-after facilitator who always receives excellent feedback from delegates. He is comfortable training at any level of seniority and experience, from “black belts” to novices. As well as his Compliance, FCC & AML specialism, his expertise includes but is not limited to Risk Management, Trade Finance and all major aspects of Corporate, Private & Retail Banking. He is also a highly experienced soft skills trainer and has completed numerous “train the trainer” assignments.

With the implementation of the 5th & 6th Money Laundering Directives (plus the 6th in Europe) many more firms involved in cash, near cash or assets that could be monetised have a responsibility to prevent financial crime. At the heart of a successful AML process is a risk assessment, leading to a risk-based approach and a clear system for onboarding, monitoring and reviewing all relationships. Escalations are the critical early warning signs of an effective AML regime and if done properly will lead to an effective and robust policy. This workshop-style course describes what “good” looks like and how to achieve it.

Who Should Attend

Anyone with an interest in the subject

Knowledge Pre-requisites

None required