Transcript No Slide Title

AML & Financial Crimes
– Hurdles in Implementation
– Potential Pitfalls and the Way
Forward
Judy Manners
October 22nd, 2005
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Agenda
 Introduction
 Pitfalls
 Hurdles
 The Way Forward
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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.
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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
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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
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……. Hurdles in Implementation
KYC & Documentation
Genuiness of Documents
Absence of a single effective
identification of individuals
control
mechanism
for
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,
Monitoring of Transactions
Due
Diligence,
Acceptance
&
Need to set up Robust Information Frameworks followed by
Continuous Analysis of Data
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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
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The Way Forward
 The Environment
o Basel Committee Recommendations
o US Legislation – Patriot Act
o Prevention of Money Laundering Act 02
o Monitoring of FATF non-members
o … Beyond Legislation …
 The Customer
o Education

The Banker
o Technology
o Process
o People
o K …. K …. KYC
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AML…. Is it a Courtship Display???
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