Unit 9 - Managing the Risk of Money Laundering and Terrorist Financing

Unit 9 - Managing the Risk of Money Laundering and Terrorist Financing

1. Money Laundering

   • Many different forms
     • Property eg. house, car
     • Possessions eg. jewelry
     • Proceeds of crime eg. drugs money
     • Cash eg. theft from organisation
   • Money laundering is a global phenomenon that thrives parasitically upon the world’s financial markets. It often disregards national boundaries and therefore is a problem that requires both national and international countermeasures.
   • Contributing to the ML process, however small, is committing an ML offence
   • Money launders: disguise ID, conceal ownership o property, conceal that they own & control property, place distance (physical & on paper) in relation to property.
   • The 3 stages
     • PLACEMENT: eg. deposit money in a/c
     • LAYERING: eg. transactional stage - move money to other a/cs
     • INTEGRATION: eg. 'washed money' now used within the legitimate economy
   • Business awareness programme for all staff
     • Staff vigilance
     • Staff understand legal obligation
     • Show why certain products/services are vulnerable
     • Relevant training to relevant staff
     • Train staff in good CDD and its importance
     • Who the MLRO actually is
     • Understand the importance of AML for business but also society
     • Awareness of policies and procedures for AML
     • Educate staff on suspicious activity and how to recognise it
   • MLRO role
     • Recording & Reporting on STRs or SARs
     • Evaluation of STRs / SARs
     • Judge if STR/SAR requires reporting to the authorities
     • Is the main contact point for the authorities
     • Be independent
     • MI & monitoring
     • Awareness of new ways to ML
     • Trend / weakness analysis