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Judy Manners October 22 nd , 2005

AML & Financial Crimes – Hurdles in Implementation – Potential Pitfalls and the Way Forward. Judy Manners October 22 nd , 2005. Agenda. Introduction Pitfalls Hurdles The Way Forward. Introduction – The Money Launderer. Whosoever directly or indirectly -.

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Judy Manners October 22 nd , 2005

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  1. AML & Financial Crimes – Hurdles in Implementation – Potential Pitfalls and the Way Forward Judy Manners October 22nd, 2005

  2. Agenda • Introduction • Pitfalls • Hurdles • The Way Forward

  3. Introduction – The Money Launderer Whosoever directly or indirectly - • Attempts to indulge / deliberately assists or knowingly becomes a party • Actually involved even unknowingly in any process / activity connected with the proceeds of crime • projecting the same as untainted property is guilty of the offence.

  4. Introduction – Money Laundering & Financial Crime • THE WHAT Terrorist Financing, Drug Trafficking, Trafficking in Human Cargo, Corruption • HOW MUCH ?? Global /annual volumes range - US$ 800 million to 2 trillion • Erosion of the Financial System

  5. Hurdles in Implementation ……. • Competitive Environment for Banks with Overseas Operations • Comply with standards in the Home Country • Follow regulations of the Host Country • Legal Hurdles : Immunity, Extradition & Repatriation of Stolen Wealth

  6. ……. Hurdles in Implementation • KYC & Documentation • Genuiness of Documents • Absence of a single effective control mechanism for identification of individuals • Skill Sets - Not readily available • Level of Automation & CBS • Manual Branches co-exist with fully / partially computerized branches • Decentralised Customer Delivery & Centralised Processing • Complex Relationships • Customer Identification, Due Diligence, Acceptance & Monitoring of Transactions • Need to set up Robust Information Frameworks followed by Continuous Analysis of Data

  7. Pitfalls in Implementation • The Market • Capital Account convertibility • Active Money & Capital markets • Holding & Shell Companies • The Government • The Structure • Huge Deficit financing • Economically Weak • Trade, Tax Policies • Corruption • Legislation • Nefarious Groups • Nexus / Net Working of Terrorist organizations • Cornering of Resources

  8. The Way Forward • The Environment • Basel Committee Recommendations • US Legislation – Patriot Act • Prevention of Money Laundering Act 02 • Monitoring of FATF non-members • … Beyond Legislation … • The Customer • Education • The Banker • Technology • Process • People • K …. K …. KYC

  9. AML…. Is it a Courtship Display???

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