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How to Combat Money Laundering, Financial Crime and the Abuse of Electronic Payments
4-day intensive residential programme, 26 –
30 March 2006
Venue: Cumberland Lodge The Great Park, Windsor
Course director: Richard Pratt, Regulatory consultant and former Director
General of the Jersey Financial Services Commission
Series adviser: Charles Goodhart, CBE
Professor Emeritus, London School of Economics, Financial Markets Group
Details of how to register are here
HOW TO COMBAT MONEY LAUNDERING, FINANCIAL CRIME AND THE ABUSE OF ELECTRONIC PAYMENTS: a practical guide for official policymakers
Financial supervisors can increasingly point to laws and regulations which conform with international standards on anti money laundering. But this is not by itself enough to protect the financial and payment system from abuse by criminals and terrorists. Policymakers and supervisors need to fully understand the purpose of these regulations and be able to implement them successfully. They must also build and maintain domestic confidence in the anti money laundering regime and prove its effectiveness to external evaluators.
The Financial Action Task Force on money laundering (FATF), the International Monetary Fund (IMF) and the European Union are all now working to ensure that members and non-members alike upgrade significantly their framework for combating money laundering. The IMF’s programme of country assessments, and the new stance of the US administration, means that central banks and regulatory authorities must focus as never before on how to ensure that they meet international standards. All the competent authorities and institutions realise the need to upgrade skills and techniques in this area, and the need to share and disseminate knowledge and best practice.
To help officials keep in touch with this rapidly-moving regulatory environment, this training course/seminar pinpoints what financial policymakers (as financial supervisors, and as overseers of national payment systems) can do to prevent the misuse of their banking/financial/payments system for money laundering or other criminal purposes, and to address the international pressure to demonstrate compliance with standards. It is a pragmatic course, intended to provide practical solutions.
The seminar meets in roundtable format to allow an international group of delegates maximum opportunities to learn from each other. The elite panel of speakers comprises leading regulators, academics and practitioners. The seminar will be chaired by Richard Pratt, former director general of the Jersey Financial Services Commission and now a regulatory consultant to the IMF and others, who writes and lectures on anti-money laundering issues. All discussions are held in small groups to encourage lively and informal debate. The discussions are completely private, and only public policy officials are able to attend.
Key sessions examine:
• the changing international standards for best practice in this area;
• the key steps involved in upgrading and reforming national anti-money-laundering systems;
• meeting the expectations of international evaluators; and
• the most effective models for international cooperation between regulators and judicial and investigative authorities around the world.
Each topic allows participating supervisors and central bankers an opportunity to “benchmark” their work against best practice internationally and to exchange views with their peers in an informal setting.
For more information about the programme, please take a few moments to look at the detailed course contents presented on the pages which follow.
I look forward to welcoming you to Windsor.
Yours sincerely,
William Clarke, PhD, CBE
Chairman, Central Banking Publications
Chairman: Richard Pratt, Regulatory consultant and former Director General of the Jersey Financial Services Commission
Introduction
and delegate presentations
This session will introduce the
course and invite delegates to discuss the main challenges their organisations
face with the rest of the group, drawing on the wide range of expertise
and experiences present. Participants will also be offered to the opportunity
to express their main areas of interest in the course.
Overview of the FATF requirements
Sean
Byrne
Senior Policy Advisor, HM Treasury
In June 2003, the Financial Action
Task Force on money laundering (FATF) released a wholesale revision
of its anti money laundering blueprint. Coupled with new special recommendations
on combating terrorist financing, the latest agreed in October 2004,
these changes represent the most significant extension of the FATF rules
since their introduction in 1990. Pressure to implement these standards
(and to be seen to implement them) is growing. Financial market authorities
must be aware of all the new responsibilities imposed on them by these
revised standards. In addition, supervisors must understand how, in
practical terms, FATF standards can be adapted by them to prevailing
legal and national circumstances.
The requirements for the legal infrastructure
Andrew
Le Brun
The FATF recommendations include
detailed provisions on the necessary legal provisions that need to be
in place to allow an effective AML/CFT regime to be enforced. Supervisors
need to be aware of these legal preconditions so that they can operate
effectively within the legal infrastructure.
Complying with US extraterritorial requirements
Kern
Alexander
Judge Institute, Cambridge
University
Since 2001, the US administration
has placed efforts to deny funds to terrorists and to prevent money
laundering at the top of its agenda. The US Financial Services and Modernization
Act 2000 and the PATRIOT Act provide US authorities with substantial
new powers to regulate the global activities of multinational banks.
Given the significance of the US dollar in the world’s financial
system, US legislation has a profound effect on any institution with
an international presence. This session examines the implications of
this legislation for non-US supervisors.
Chairman: Richard Pratt, Regulatory consultant and former Director General of the Jersey Financial Services Commission
Dayanath Jayasuriya
Chairman of the SEC and the Insurance Board of Sri Lanka
How can regulators ensure that their requirements are being complied with and that their AML regime is robust? This session will look at the core elements necessary for successful implementation and enforcement, including systems, controls, training and records, and will discuss the key features of corporate governance that institutions should be expected to adhere to in order to satisfy the regulator.
The issues facing banks in a risk-based regulatory environment
Hans Peter Bauer
Former Head of Regulatory Relations for UBS and Chairman, Wolfsberg Group
Modern, global banks face immense regulatory and reputational risk in connection with money laundering. In response, they have allocated substantial resources to anti money laundering controls, and have also developed risk-based approaches to deploying these resources. This session will explore how international banks in practice defend against money laundering, the implications of regulatory requirements, and how the actions of regulators can help or hinder these efforts.
Managing intelligence on individuals and firms
David Leppan
CEO, World-Check
Combating money laundering and the financing of terrorism requires above all that regulatory authorities compile and keep up-to-date lists of suspicious persons and organisations. New FATF recommendations require supervisors to pay particular attention to “politically exposed persons” (i.e. high risk individuals who may be conduits for looted funds). Each of these responsibilities requires new skills and intelligence-handling capabilities by banks and their supervisors. This session draws on the experience of World-Check, a private-sector provider of intelligence to the financial industry, to examine how these new duties can be discharged.
Commercial banking perspective – implementing know-your-customer rules
Sally Scutt
Deputy Chief Executive, British Bankers Association
The first line of defence against money laundering or the financing of terrorism must be the individual financial institutions that are in direct contact with customers. Many large financial institutions are undertaking root-and-branch reform of their procedures, especially with regard to certain firms and transactions – including private banking, correspondent banking relationships and shell banks – perceived as high risk. This session considers the new safeguards which financial institutions have put in place, how this affects their foreign branches and subsidiaries, and how much of this experience is more widely applicable.
Chairman: Richard Pratt, Regulatory consultant and former Director General of the Jersey Financial Services Commission
Mounting
investigations – case studies
David Thompson
Formerly Head of Economic
Crime, Northern Ireland
Effective evaluation of anti money laundering regimes
John Aspden
CEO of the Financial Supervision Commission in the Isle of Man
Increasingly, financial supervisors themselves are expected to submit to evaluation by international examiners. Such evaluations now focus not only on the financial regulatory regime in general, but also on how well the regime works to combat money laundering. How can financial market authorities best prepare for and cooperate with this scrutiny to achieve the most positive outcome?
How does the IMF evaluate adherence to requirements?
R. Barry Johnston (to be confirmed)
Assistant Director, Monetary and Financial Systems Department, IMF
Following from the previous session, the speaker, who is responsible for the IMF’s offshore financial sector assessment program, will describe the various stages of the Fund’s assessment process. The session will also cover the main findings of assessments that have been conducted, and offer recommendations on how regulators can improve their performance based on these experiences.
Enforcing
requirements on banks and firms on a risk-weighted basis
Edna Young
(invited)
Financial Crime Sector Manager, UK Financial
Services Authority
Regulatory resources are limited,
and regulators need to prioritise their approach to money laundering.
Using a riskbased approach to enforcing regulations is a powerful solution,
but to many this remains a novel and daunting challenge. This session
will consider how a regulator can differentiate between businesses and
products on a risk-weighted basis, and how it can then apply its enforcement
efforts most efficiently.
International co-operation
Richard
Pratt
International co-operation in the
form of information exchange, asset freezing, taking testimony and obtaining
documents is essential to a successful defence against money laundering
and terrorist financing. This session examines the standards required
of financial supervisors and the issues that arise when they are asked
to share information with others, including financial intelligence units
and regulators from different sectors.
Course conclusion
In the final session, the chairman
will draw together the different themes of the course and invite delegates
to reflect on lessons learnt and identify priorities for action at national
and international levels.
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