1. ANTI-MONEY LAUNDERING
AND SUSPICIOUS
TRANSACTIONS …Highlights

2. This presentation is for information purposes only and is not intended as an offer.
The services mentioned in this document may be subject to legal restrictions in
certain countries and may therefore not be on offer in their entirety everywhere.
Content may be amended without prior notice. The presentation may not be
reproduced nor may copies be distributed without authorization.
Disclaimer

3. Overview
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their clients and our global partners

4. INTRODUCTION TO ANTI MONEY LAUNDERING
In October 1931, Al Capone was prosecuted and
convicted of Money Laundering , it was based on his
conviction that Robinson stated the below;
"Money laundering is called what it is because that
perfectly describes what takes place - illegal, or dirty,
money is put through a cycle of transactions, or
washed, so that it comes out the other end as legal, or
clean, money. In other words, the source of illegally
obtained funds is obscured through a succession of
transfers and deals in order that those same funds can
eventually be made to appear as legitimate income".

5. Overview
•It is the method by which criminals disguise the illegal
origins of their wealth and protect their asset bases, so as
to avoid the suspicion of law enforcement agencies and
prevent leaving a trail of incriminating evidence.
•The application of intelligence and investigative
techniques can be one way of detecting and disrupting
the activities of terrorists and terrorist organizations.

6. Overview
The term "money laundering" is said to originate from Mafia
ownership of Laundromats in the United States. Gangsters
there were earning huge sums in cash from extortion,
prostitution, gambling and bootleg liquor. They needed to
show a legitimate source for these monies.
One of the ways in which they were able to do this was by
purchasing outwardly legitimate businesses and to mix their
illicit earnings with the legitimate earnings they received from
these businesses. Laundromats were chosen by these
gangsters because they were cash businesses and this was
an undoubted advantage to people like Al Capone who

7. Overview
Financial institutions rely on their reputation for probity and integrity. A
financial institution found to have assisted in laundering money will be
shunned by legitimate enterprises.
•STAGES OF MONEY LAUNDERING
I. PLACEMENT
This is the first stage in the washing cycle. Money laundering is a
"cash-intensive" business, generating vast amounts of cash from
illegal activities (for example, street dealing of drugs where
payment takes the form of cash in small denominations). The
monies are placed into the financial system or retail economy or
are smuggled out of the country.

8. Overview
II. LAYERING
In the course of layering, there is the first attempt at
concealment or disguise of the source of the
ownership of the funds by creating complex layers of
financial transactions designed to disguise the audit
trail and provide anonymity. The purpose of layering is to
disassociate the illegal monies from the source of
the crime by purposely creating a complex web of financial
transactions aimed at concealing any audit trail as
well as the source and ownership of funds.

9. Overview
iii. INTEGRATION
At this the money is integrated into the legitimate economic and
financial system and is assimilated with all other assets in the
system. Integration of the "cleaned" money into the economy is
accomplished by the launderer making it appear to have been
legally earned.
By this stage, it is exceedingly difficult to distinguish legal and illegal
wealth.

10. Elements of an Effective AML Program
Board Approval
A written program
Designation of an accountable officer
Training
An independent review of audits
A system of internal controls;
The most important baseline of an effective AML program (or any
compliance program, for that matter) is the board of directors’
and senior management’s support for maintaining a culture of
compliance throughout the entire institution.

11. AML / Suspicious Transaction Compliance Training
One of the basic pillars of a strong anti-money laundering (AML) program for any
financial institution depends on a well designed and effective transaction monitoring
system. The basic purpose of having a strong AML transaction monitoring system is to
identify and protect the institution from any transactions that may lead to money
laundering and terrorist financing and that will also enable the monitoring units to
identify related risks and file relevant Suspicious Activity Reports (SARs) with the
appropriate regulatory authorities.
Many financial institutions across the globe are using manually designed AML
transaction monitoring reports/alerts, but with the advancement of IT Technologies,
there are a number of automated.

12. Transactions and account Monitoring and Reporting……
AML transaction monitoring solution providers available in the market that give
you the option of purchasing complete AML packages including sanctions/black
list screenings, customer profiling, comprehensive transaction monitoring with
reports/alerts etc.
A key component of a sound AML transaction monitoring system are solid AML
transaction monitoring reports/alerts. There could be a number of AML transaction
monitoring reports/alerts designed through the rules defined in the systems
according to the requirements of financial institutions. This article will discuss basic
AML transactions reports/alerts for manual/electronic AML transaction monitoring
systems

13. Transactions and account Monitoring and Reporting……
Basic reports/alerts
1. Cash deposits above and below the threshold: The criteria for this report should
be daily. It should include all credit transactions for any single customer and the
threshold would depend on the requirements in each country. The report must
also indicate the total number of customer transactions and the total number of
report transactions.
2. Cash withdrawals above and below the threshold: The criteria for this report
should be daily. It should include all debit transactions by any single customer. The
threshold would depend on the requirements in each country. The report must
also indicate the total number of customer transactions and the total

14. number of report transactions.
3. Weekly and monthly cash deposits and withdrawals: The criteria for this report
should be weekly and monthly. It should include all debit transactions by any single
customer during the week/month. The report must also indicate the total number of
customer transactions and the total number of report transactions.
4. Incoming wire transfers above and below the threshold: The criteria for this report
should be daily, weekly and monthly. It should include all credit transactions for any
single customer. The threshold would depend on the requirements in each country.
The report must also indicate the total number of customer transactions and the
total number of report transactions.

15. Others are: Outgoing wire transfers above and below the threshold, Internal transfers
above and below the threshold, Instruments deposits above and below the threshold,
Check withdrawal report above and below the threshold,
It should always be kept in mind that the success of any AML transaction monitoring
system is dependent on strong transaction monitoring alerts that are designed
according to specific rules and requirements of controlling units.
AML /SUSPICIOUS TRANSACTIONS
TRAINING

16. Typologies of Money Laundering
In the AML context, the term “typologies” refers to the various techniques used
to launder money or finance terrorism. Criminals are very creative in
developing methods to launder money .Money laundering typologies in any
given location are heavily influenced by the economy, financial markets, and
anti-money laundering. Consequently, methods vary from place to place and
over time.
Association with corruption (bribery, proceeds of corruption & instances of
corruption undermining AML/CFT measures): Corruption (bribery of officials) to
facilitate money laundering by undermining AML/CFT measures, including
possible influence by politically exposed persons (PEPs):

17. AML /SUSPICIOUS TRANSACTIONS TRAINING
e.g. investigating officials or private sector compliance staff in banks being
bribed or influenced to allow money laundering to take place.
Cash couriers / currency smuggling: concealed movement of currency to
avoid transaction / cash reporting measures.

18. AML /SUSPICIOUS TRANSACTIONS TRAINING
Structuring (smurfing): A method involving numerous transactions (deposits,
withdrawals, transfers), often various people, high volumes of small transactions
and sometimes numerous accounts to avoid detection threshold reporting
obligations.
Use of Wire transfers: to electronically transfer funds between financial
institutions and often to another jurisdiction to avoid detection and
confiscation.

19. AML /SUSPICIOUS TRANSACTIONS TRAINING
Abuse of non-profit organizations (NPOs): May be used to raise terrorist funds,
obscure the source and nature of funds and to distribute terrorist finances
Mingling (business investment): A key step in money laundering involves
combining proceeds of crime with legitimate business monies to obscure the
source of funds.
Use of shell companies/corporations: a technique to obscure the identity of
persons controlling funds and exploit relatively low reporting requirements.
Identity fraud / false identification: used to obscure identification of those
involved in many methods of money laundering and terrorist financing.

20. AML /SUSPICIOUS TRANSACTIONS TRAINING
Use “gatekeepers” professional services (lawyers, accountants, brokers etc): to
obscure identity of beneficiaries and the source of illicit funds. May also include
corrupt professionals who offer ‘specialist’ money laundering services to
criminals.
New Payment technologies: use of emerging payment technologies for money
laundering and terrorist financing. Examples include cell phone-based
remittance and payment systems.

21. Identification and reporting of suspicious transaction
Reporting of suspicious transaction is preceded by first identifying such
transactions and clients that are likely to fall in to that category
Please note that this is not an exhaustive list.
So what constitutes suspicious transactions?
•Transactions involving large cash amounts.
•Funds being "accidentally" paid into the wrong bank account.
•Constant movement of money amongst different business units (e.g. From
collective investments to linked products and vice versa) without any apparent
purpose.
•Requests for payments to be made to 3rd parties.
•Transfer of funds to other product providers.
•Cash discovered in e.g. dwelling of the deceased/disclosed by family.
•Payment of bequest amounts in cash.
•Purchasing of assets from an estate in cash.
•Transaction which has no apparent business or lawful purpose.

22. Identification and reporting of suspicious transaction
Who is a suspicious client?
•A client who provides vague or contradictory information or references.
•A client who has no record of past or present employment or involvement in a
business but who engages frequently transactions involving large sums of
money.
•A client whose business or sources of funds are ill-defined, or who is reluctant to
provide details about his/her business or source of funds.
•A client who uses a financial institution which is located far from his/her home
or place of work.
•A client who is reluctant to disclose other bank or business relationships.
•A client who operates different accounts at different branches of the same
financial institution.
•A client who enters into transactions that do not appear to have a legitimate
business purpose or that are out of the ordinary given the client’s profile.
•A client who is reluctant to reveal information concerning the nature of his/her
specific business or does not seem to be fully aware of the nature of the
business.
•A client who acts for an undisclosed principal.

23. Identification and reporting of suspicious transaction
Scenarios of suspicious activities to be considered:
The threshold for additional information in our country is N5, 000,000 for Individuals and N10, 000,000 for Clients.
Scenario 1: A customer sends a N4, 900,000 money transfers. The next day the customer sends N4, 900,000 to the
same person. The customer may be structuring his transactions in order to avoid High Currency Amount Transaction
Reporting requirements. You should consider whether a Suspicious Transaction Report should be filed.
Scenario 2: A Corporate client sends money transfers just below N10, 000,000 over the course of several days. The
customer may be structuring his purchases and you should consider whether a Suspicious Transaction Report needs
to be filed.
Scenario 3: A customer comes in several times on the same day to pick up money transfers which adds up to more
than N5, 000,000 you should also consider whether a Suspicious Transaction Report needs to be filed.
Scenario 4: A customer picks up a money transfer from your location. After the customer has left, you discover that
the customer also picked up money transfers at some of your other offices on the same day. The customer may be
attempting to avoid the reporting requirements. You should consider whether structured or suspicious activity has
occurred. If you conclude that structured or suspicious activity has occurred, you must file a Suspicious Transaction
Report. If the total amount of currency paid to the customer passes the Money laundering transaction reporting
requirements, you should also consider filing a money laundering transaction report.
Scenario 5: A corporate client says that he wants to send a N11, 000,000 money transfers and wants to pay for it
with cash. When you tell the customer that you will need to complete money laundering transaction report. If the
client says that it no longer wants to send the transaction, or asks how it can avoid having a report filed on the
transaction. You should consider filing a suspicious transaction Report on the transaction or attempted transaction

24. AML /SUSPICIOUS TRANSACTIONS TRAINING
…..THANKS FOR BEING A GREAT AUDIENCE….