Do you really ‘know your customer’?
The fight against financial crime
The global fight against money laundering and its closely related partner-in-crime, terrorist financing, has seen increased attention since the events of 9/11 and 7/7. Anti-money laundering (‘AML’) legislation and compliance are now key areas of focus for banks and other regulated service providers.
With the International Monetary Fund estimating the scale of global money laundering as being the equivalent of between 2 and 5% of the world’s gross domestic product, and the UK Home Office estimating the economic cost of serious crime in the UK to be between £19bn and £48bn per year, this focus seems likely to become more acute in the coming years.
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The introductions of The Money Laundering Regulations in 2007 and related guidance from the Joint Money Laundering Steering Group on the meaning of a risk-based approach to AML compliance, have received a mixed response from the AML profession. To some, they represent a welcome opportunity to ensure that compliance resources are focused as efficiently as possible; to others, they threaten complexity, the risk of regulatory sanction, damaged reputation, and a loss of revenue through uncompetitive processes.
The reality is that for most businesses, they have the potential to become either of these outcomes. However, sensitivities have recently been heightened by the increasing extra-territoriality of US laws and the apparent willingness of the FSA to fine individuals for failures in internal control. We saw the FSA fine an individual Money Laundering Reporting Officer for the very first time on 29 October 2008 for not having adequate anti-money laundering systems and controls in place for verifying and recording clients’ identities.
Against this backdrop, how does a regulated financial institution seize the business opportunity that a risk-based AML approach presents, whilst minimising the risk of censure and loss of reputation to itself and its staff?
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The provision of bespoke AML and sanctions advice is part of our unique financial crime offering. Our forensic professionals have extensive experience of offering tailored solutions to leading financial institutions as well as smaller organisations. This industry experience has been gained through the provision of first-hand assistance in the development of our clients’ AML policies and procedures and from secondment to their risk functions.
Our aim at Baker Tilly is to provide you with the AML and sanctions support needed to give you the comfort that your system of internal control is operating as effectively and efficiently as it must. To achieve this we will provide our advice across a wide range of areas, which may include:
- An independent review of your AML and sanctions approach to provide you with comfort that you have reasonably analysed and understood your key risks.
- In doing so, we will seek to identify gaps and weaknesses, and to provide advice on ways in which the effectiveness and cost efficiency of your system of controls could be improved.
- Corporate intelligence to assist you with 'know-your-customer' compliance as well as due diligence into prospective business partners. We have unique expertise amongst the major accounting firms for identifying and turning intelligence into useable evidence.
- Assistance with investigation response and remediation management to help you deal with suspicious activity reports (SARs) or regulatory enquiries around AML, sanctions compliance, market abuse and related risks.
- Training and awareness programmes to help raise internal standards of AML response and compliance.
- An evaluation of your transaction monitoring solution.