Securities and Investment Institute / An Introduction to Money Laundering Deterrence

MLRO. The safe harbour and its limitations. Matrix management. What is an MLRO's internal reporting procedure? What is contained in the MLRO's Annual Report? 10 MONEY LAUNDERING TRAINING. The importance of staff awareness and training. The core obligations of training. Legal and regulatory obligations. Staff responsibilities. Internal training procedures. Training methods and assessment. 11 KNOW YOUR CUSTOMER. What is Know Your Customer? Why should firms carry out KYC requirements? What does KYC involve? What are the general issues? Reliance on third parties. The Third EC Directive - KYC requirements. The UK KYC requirements. 12 RETAIL CUSTOMER IDENTIFICATION. Who are retail customers? Basic retail identification evidence. Documentary verification. Customer exclusion. Electronic verification. Impersonation fraud. Family members. Transaction monitoring. Source of funds. 13 CORPORATE CUSTOMER IDENTIFICATION. Who is a corporate customer? Risks associated with corporate customers. Beneficial owners. Standard evidence for corporate entities. Private and unlisted companies. Enhanced due diligence. Charities and trusts. 14 POLITICALLY EXPOSED PERSONS. What is a politically exposed person? The definition of a politically exposed person (PEP). At what level is someone a PEP? Prominent public functions. The immediate family rules. The associate rules. What is the risk-based approach? The risk-based approach to determining PEPs. Transparency International. 15 NON FACE-TO-FACE CUSTOMERS. Who are non face-to-face customers? Additional measures for non face-to-face customers. Risk-based approach to non face-to-face customers. 16 SUSPICIOUS CONDUCT AND TRANSACTIONS. Introduction. What is a suspicious transaction? Activity inconsistent with the customer's business. Avoiding a national reporting or record-keeping requirement. Wire or fund transfers. Insufficient or suspicious information by customer. Other suspicious customer activity. 17 UNUSUAL TRANSACTIONS. The identification of unusual transactions. The development of policy. The types of events that might cause suspicion. The problems of customer identification. What might highlight terrorist activity? 18 INVESTIGATING SUSPICIONS. The investigation process. Making a report. Internal reporting. External referrals. What is meant by "knowledge" and "suspicion"? What is meant by "reasonable grounds" to know or suspect? The investigation by the nominated officer. Reporting in the UK. Sanctions and penalties for failing to comply. 19 ONGOING MONITORING. The importance of ongoing monitoring. The link to customer relationship management. What does ongoing monitoring involve? Enhanced ongoing monitoring. The risk of dormant accounts. What type of enhanced monitoring is required? Automated vs. manual systems of monitoring. Issues to consider when implementing a monitoring system. Staff training. 20 TIPPING OFF. Introduction. Letting the customer know. The problems in practice. Penalties for tipping off. Communications with customers under investigation. 21 RECORD KEEPING. The purpose of record keeping. What records have to be kept? In what form should records be kept? Failure to keep records. 22 RISK MANAGEMENT. The relationship between money laundering deterrence and terrorist fi nancing programmes and risk management. The risk of money laundering and terrorist fi nancing. Money laundering and terrorist fi nancing risk. 23 MONEY LAUNDERING DETERRENCE SOFTWARE. What is money laundering deterrence software? The effectiveness of money laundering deterrence software. Transaction monitoring. What type of actions will be monitored by the software? The benefi ts of anti-money laundering (AML) software. What type of software is currently on the market? Selecting your software. What about the smaller firm? ANNEX. Index.