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Financial Crime and Compliance Masterclass Including CTF & AML

A practical two day workshop suitable for banks and other financial institutions

Effective Model Building Techniques Using the FAST Standard & ICAEW 20 Principles

A two-day course

  • Redcliffe is a market leader in FCC training and has been the primary supplier of trainers to two of the worlds largest bank’s for several years. This is a core competency for us and we are certain nobody trains more effectively than we do when it comes to this topic.
  • The course director is an acknowledged subject matter expert and is also a Master Trainer in both FCC and Risk Management at the worlds biggest trade finance bank
  • We don’t use academics as trainers. All our trainers are practitioners who achieved at least senior management status over long careers. Your course director has been in the industry for over 40 years and was a former main board director of a London based merchant bank
  • The workshop is packed full of real-life case studies and discussion sessions and delegate involvement is encouraged at all times
  • We are judged solely by our results and we are proud to say that delegates feedback over many years has always been excellent

  • Understand fully the regulatory and best practice requirements necessary to combat FCC
  • Be fully conversant with the mandatory risk-based approach, how it is created, how it is managed and the controls that it drives
  • Understand how MLR 2017 has broadened the scope of AML requirements to include all meaningful professionals exposed to this risk
  • Appreciate the need for an holistic approach to FCC and the importance of ensuring it becomes part of business as usual
  • Recognise the importance of managing the customer journey throughout the process to ensure that compliance does not become unpleasant or a deal-breaker for them
  • Appreciate how important it is to persuade staff at all levels to take this seriously and discharge their duties effectively
  • Understand how money laundering is carried out in practice in order to put in place effective mitigants and controls to prevent it.
  • Recognise that the key component to an effective FCC process is sound judgement, common sense and a full understanding of the rules so when decisions have to be made, they are the appropriate and most effective

Introduction:

  • What is FCC
  • Predicate Crimes
  • What is AML
  • The Scale of the problem
  • What is CTF
  • What are financial institutions required to put in place – overview
  • What is CDD, KYC, IDV
  • Who is responsible for FCC Compliance?
  • Best Practice/Poor practice

Who sets the rules and who publishes best practice guidelines?

  • FCA
  • UN
  • EEC
  • The USA – OFAC
  • BIS – CRDIV & Basel
  • UK Treasury
  • Local Jurisdictions
  • Best Practice Guidelines
    • FATF
    • Wolfsberg Group
    • Transparency International
    • JMLSG
    • Egmont Group

Money Laundering Regulations 2017

  • Changes
  • General risk assessment
  • Risk mitigation policies
  • Level of due diligence
  • Reliance on third parties
  • PEPs
  • New Criminal Offence
  • Office for Professional Body Anti-Money Laundering Supervision (OPBAS).

What must Institutions Do to Comply

  • Initial Risk Assessment
  • Risk-Based approach
  • Risk Assessment Methodology
  • Risk-based controls & mitigants
  • Material Trigger Events
  • Traditional three lines of defence model
  • Staff training and competence
  • The Customer journey
    • Risk Appetite
    • Decision to proceed
    • CDD process driven by risk assessment
    • Onboarding process
    • Transaction Monitoring
    • Escalations
    • Escalation Process
  • The Role of Internal Audit
  • The role of external auditors
  • The role of the regulator

Sanctions – Brief Overview

  • Who sets them & why are they set
  • Who is impacted
  • What are they
  • OFAC and the US dimension
  • When should screening take place
  • “In Flight” Screening
  • Other screening

Counter/Anti Terrorist Financing

  • A different management challenge – why?
  • Following the money
  • Dormant accounts
  • The scale of the problem
  • Effective controls
  • Informal Value Transfer Systems
  • Charities / Non-Profit Organisation
  • Screening processes

Examples of How Money Laundering Carried Out In practice

  • Smurfing
  • Co-mingling
  • Additional Bank Accounts
  • Using property and other assets
  • Complex Money Laundering
  • Under and Over Invoicing
  • “Phantom” transactions
  • Quality and quantity manipulation
  • Asset Management
  • Fine Art
  • Near money instruments
  • Attempting to circumvent client identification requirements
  • Smurfing, using nominees and/or other proxies
  • Use of a Broker account with little trading
  • Activity of Wash Trading

Essential Control Mechanisms

  • Customer Due Diligence
  • KYC – getting to know the customer
  • IDV – checking what they say
  • EDD & DDD
  • Source of Wealth
  • Source of Funds
  • Ultimate Beneficial Ownership
  • PEP’s
  • Effective escalation process
  • Transaction monitoring
  • Behavioural Monitoring with Swim Lines (Subject to cost constraints and complexity)
  • Remediation process
  • Exit and mitigation process
  • Review process
  • Oversight process using a 3LOD model

Politically Exposed Persons

  • Definition – formal
  • Definition in practice
  • Why are they a special case
  • Mandatory high risk
  • UBO issues
  • Source of Wealth issues
  • Annual Review issues
  • Domestic/Local PEPS

Specific Identification & Verification Issues

  • Trust nominee and fiduciary accounts
  • Corporate vehicles
  • Introduced business
  • Client accounts opened by professional intermediaries
  • Non-face to face customers
  • Correspondent banking – KYC requirements and Due Diligence
  • Offshore Clients

Constructing the FCC Framework

  • Policies
  • Roles and Responsibilities
  • Senior Management and M.I. requirements
  • The MLRO (or equivalent) challenge!
  • Risk Assessments and Procedures
  • Suspicious transactions

Suspicion & Escalation

  • What must banks have in place
  • An effective escalation process
  • Concern
  • Suspicion
  • Access & Process
  • Communication lines
  • Suspicious Activity Reports / Suspicious Transaction Report
  • The importance of a direct link
  • Whistleblowing

Practical Examples of f Money Laundering

  • Electronic Funds Transfer
  • Correspondent Banking
  • Payable Through Accounts
  • Downstream Correspondent Clearer
  • Concentration Accounts
  • Wealth management
  • Structuring
  • Insiders & Staff complicity
  • Credit Cards
  • Money Remitters & Money Exchange Houses
  • Insurance Companies
  • Securities Broker-Dealers
  • Casinos & Gambling businesses
  • Dealers in High-Value items (Art, Jewellery, Precious Metals etc)
  • Travel Agencies
  • Vehicle Sellers
  • Notaries, Accountants, Lawyers, Auditors
  • Real Estate
  • Loan Back Method
  • Import/Export Transactions

High-Risk Products  & Services

  • Movement of monies
  • Movement of value
  • Speed of movement
  • Other material parties make/receive value
  • Anonymity of parties
  • Use of 3rd party channels
  • Cross border movement
  • Access to cash or cash equivalent instruments
  • Internet Casinos
  • Prepaid Cards and E-Cash

Structures used to hide UBO

  • Shell companies
  • Trusts
  • Offshore Structures
  • Bearer Bonds & Securities
  • Staff Training – Who, What, How, When & Where

Other Key Issues & Open Forum Talking Points:

  • AML Policies and Procedures – What is the difference and why are they important?
  • Probability of an offence crystallising – using leading case studies
  • Risk of not reporting – using real case studies
  • Understanding what ML & TF is – dispelling the myths!
  • Government and other Sanction risks in practice
  • Understanding the difference between KYC – ID&V – CDD
  • Profiling customers – what does it mean?
  • Building and using trigger events in practice
  • What do you do if you are suspicious
  • Recognising and handling suspicious transaction reports
  • Human factors in money laundering risk management
  • Abuse of structures and financial services provider

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.

Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become the key strategic imperatives for all board members.

The reputational damage and not to mention the fines imposed for non-compliance are huge concerns. It is fair to say that banks are being micro-managed by regulators in this area and are being set exceptionally high standards for compliance.

Financial institutions are required to focus increasingly on Financial Crime Prevention measures and must have robust systems in place to combat them. This includes detailed policies, clear lines of defence, robust CDD processes, a risk-based approach, clear accountabilities and above all effective staff training and awareness throughout the organisation.

None of this is difficult but it is costly, time-consuming and involves putting in place procedures and systems to deter, detect and protect the institution from being used by criminals.

Who Should Attend

Anyone with an interest in the topic

Methodology

Highly interactive workshop with packed full with real-life case studies and discussions sessions

Have this course presented In-House

  • On a date, time and in a location of your choice
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Have this course pre-recorded

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