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AML/CTF The Current Scene

AML/CTF The Current Scene. David Coates Director Financial Crime BBA/Secretary to the JMLSG. Introduction. What I do: BBA JMLSG Health Warning. The Spinning Plates. Revision of the 2006 Guidance Draft Money Laundering Regulations to Implement 3 rd MLD SOCA and all its works

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AML/CTF The Current Scene

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  1. AML/CTF The Current Scene David Coates Director Financial Crime BBA/Secretary to the JMLSG

  2. Introduction • What I do: • BBA • JMLSG • Health Warning

  3. The Spinning Plates • Revision of the 2006 Guidance • Draft Money Laundering Regulations to Implement 3rd MLD • SOCA and all its works • Financial Action Task Force • US Growling

  4. Revision of the 2006 Guidance • Why necessary? Firms stuffed to the gills with new obligations? • 3rd MLD requires it • Not a massive change. Change PEPs, reliance, more choice on record keeping, beneficial owners • Bigger changes for some non-FSA regulated institutions

  5. Process • 2006 Treasury Condoc on Principles • 22 January Treasury Condoc on draft Regulations • MLAP Working Party • JMLSG Editorial Panel

  6. Relevance to MLROs • Available time? • Worth Reading Condoc and BBA response • Otherwise wait until appearance of JMLSG Guidance in June • Parliament to approve new legislation in June/July • Implementation by 15 December

  7. 3rd MLD • Intended to create level playing field • No more Commission texts? • Driven by FATF

  8. FATF Mutual Inspection • To keep member states honest • UK’s turn 06-07 • Year long Process • Mutual Inspection Team visited • Late November-early 07

  9. Inspection Visit Outcome • Largely unknown. Ist Draft report due to be presented to Treasury early March • Some hints: View of JMLSG Guidance FSA and small firms

  10. FATF Process: next steps • Treasury Comments • May - “face to face” • Secretariat Paper to Plenary in June • Plenary amend/adapt • UK implements recommendations

  11. SOCA: the geography • Complicated • Proceeds of Crime • Financial Intelligence Unit (Including consent desk) • SARS Committee • Small Vetted Group

  12. SOCA: snap analysis • Lander report • 18 month to implement • On track so far • Variation in Quality

  13. Proceeds of Crime Intelligence Enforcement Intervention Prevention & Alerts Crime Techniques International Corporate Services E-Crime SOCA ORGANOGRAM

  14. Head of Proceeds of Crime Business Strategy Operations UK FIU PROCEEDS OF CRIME

  15. Head of UK FIU SAR Admin Consent Dialogue Intel. Inter- national Terrorist Finance UK FIU-STRUCTURE

  16. More Geography • Preventions and Alerts • Committee on Programme #4 (Criminal finances) • PEPs Unit • Human Trafficking Section • Sector Specific Seminars

  17. SOCA: the risks • Ships that pass in the night • Exaggerated expectations • Impatience • Underresourcing • Compliance fatigue • LEA Resentment

  18. More risks • Government impatience • Over bureaucratic structure • Shortage of key skills analysts, financial sector personnel • Form over substance

  19. SOCA: future trends • Standard Glossary • Improved feedback • Typologies? • More intelligence-led activity

  20. Reform of the consent regime • Everyone, except the lawyers knows there is a big problem • Detailed discussion over the summer • Home Office convinced Consultation paper in March-maybe

  21. FSA: recent reorganization • Financial Crime Division (was Sector) • Under Philip Robinson • Includes a Financial Crime Sector Leader-Lauren Jordan (replaces Edna Young)

  22. Implications • FSA say they need to be more proactive in addressing their financial crime objectives • Suspects industry does not regard it as a serious player • Will still concentrate on firms having adequate systems and controls to prevent financial crime

  23. More Implications More training for supervisors New intelligence system to help identify poorly performing firms and sectors More thematic studies and case work More frequent visits to more firms (FATF)

  24. YET MORE • Coordinated approach to information security; • Protection of personal financial data (including that held outside financial sector by e.g. energy suppliers) • Review of off shoring-call centres or MLRO operations

  25. Role in revision of the JMLSG Guidance • Draft Paper on FSA’s approach to industry-generated Guidance • Carve-out for 2006 Guidance. Approved by Treasury Minister not FSA • Involved informally in revision process. Can squawk at MLAC if necessary

  26. THE END • Contact Details - david.coates@bba.org.uk - 0207 216 8853 • Questions on Guidance -david.swanney@bba.org.uk

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