SlideShare una empresa de Scribd logo
1 de 21
Descargar para leer sin conexión
UUUK6103 Banking Law and Practice

Anti-Money Laundering and
Counter Financing of Terrorism
Banking and Deposit-Taking Institutions
Name
Matrick No.
Date
Lecturers

:
:
:
:

Punithemalar Hariaratnam
GP01285
30 November 2013 (Saturday)
Felo Aminurasyed Mahpop
Money laundering is a conversion of criminal
income into the assets that cannot be traced
back to the underlying crime
~ Reuter & Truman
•
•

•

Al Capone
notorious Chicago gangster

Started in 1920s, official in
1980s
Criminals earning huge
amounts of money from drug
trafficking, weapons smuggling
and extortion need to show an
legitimate source of income
Embarked on laundering
process
•

Filtering
Black market deals paid in cash divided in small deposits to avoid and large and
conspicuous bank deposits

•

Illegal activities
Banking
Gambling
Precious metals and luxury item
Change hands enough time that origin become untraceable
Filtered through fake companies
Casinos nightclub restaurants

•

Investment
Property market
Art

Hard to access in today’s global economy
IMF 2-5% gdp linked to black market
Terrorism Financing
Sept 11 incident highlighted the association of money
laundering with terrorism financing activities
According to FATE, terrorism financing comes from 2 primary
sources
• support by states of specific entities
• personal donations, (money laundering activities)
• It became immensely important for banks and financial
institutions to provide an effective system to deal with
suspicious transaction
• The Bank of Credit and Commerce International (BCCI)
collapse in 1991, the Citibank and Bank of New York scandals
in 1999 and the Riggs Bank scandal in 2002 have exposed the
danger posed by money laundering to the banking system
• The scandals reveal that even the worlds best known banks
have become the central elements in MONEY LAUNDERING
• Without implementation of anti money laundering measures,
banks may find themselves either directly or indirectly
assisting money launders
If this continues
• Customer lose confidence
• Threat to honest financial institutions to prove their
good standing
• Suffer reputational risks
• Increase internal fraud & criminal activities
Malaysia passed the Anti-Money Laundering and Anti-Terrorism
Financing Act in 2001.
AMLATFA is implemented by multi-law enforcement authorities
led by the Bank Negara Malaysia (BNM)
As at July 2010, 94 money laundering cases are in various stages
of prosecution in Malaysia with more than 3000 charges involving
proceeds amounting to RM1.2 billion
AMLATFA criminalizes money laundering and requires banks to
put in place proper identifying, recording and reporting
procedures; appoint money laundering reporting officer; make
staff aware of the AML laws and provide proper training
The main reason for bank’s existence is to make as much
profits as possible
AML laws create a major dilemma for banks as they produce
a significant shift in the way banks interact with their
customers

Implementation of the laws not only creates significant
compliance problems for banks, but also has the potential to
adversely affect the operations of the banks
Reporting Obligations Under AMLATFA
•
•
•
•
•

obligation to report cash
suspicious transactions
identify and verify customers
keep records
establish AML compliance program
In November 2006, BNM as the Malaysian AML regulator issued
two sets of guidelines, namely
• Standard Guidelines on Anti-Money Laundering and
• Counter Financing of Terrorism (Standard Guidelines) and
Sectorial Guidelines 1 for Banking and Financial Institutions
These Guidelines are in line with the international anti-money
laundering standards issued by the Financial Action Task Force
(FATF)
It is an inter-governmental body with 36 members and with the
participation of over 180 countries through a global network of
FATF-style regional bodies
Section 14 requires the banks to submit two types of reports.
The first type of report is the Cash Transaction Report (CTR).
Under section 14(a) banks must report to the Financial
Intelligence Unit (FIU) any transaction that exceeds the
specified threshold amount
Section 13(4), banks are required to aggregate multiple cash
transactions in a day that exceed the threshold amount as a
single transaction if they are undertaken by, or on behalf of,
one person.
The second type of report that banks have to submit is the
Suspicious Transactions Report (STR). STR refers to a piece of
information which alerts law enforcement that certain activity
is in some way suspicious and might indicate money
laundering.
Under section 14(b), a STR should be made when the identity
of the persons involved, the transaction itself, or any other
circumstances concerning the transaction, gives rise to
suspicion.
Section 16(1) requires the banks to maintain accounts in the name of
accounts holders and prohibits the opening of anonymous accounts or
accounts which are in a fictitious, false or incorrect name
Sub-section (2) requires the banks to verify the identity of the account
holder, the identity of the person in whose name the transaction is
conducted as well as the identity of the beneficiary of the transaction
Section 5(1) specifies that customer due diligence measures must be
conducted when there is a suspicion of money laundering or when
there is a doubt about the veracity or adequacy of information on the
identity of the account holder which it has obtained previously
Section 5(2) (b) requires the banks to identify and verify the identity of
the beneficial owner of its customer
This view has been proven correct when it was reported in
2006 that failure to identify and verify a customer can
result in the dismissal of staff by a bank.
This can be seen in the Industrial Court case of
Southern Bank Berhad v. Yahya Talib
Section 13(1) requires banks to keep a record of any
transaction involving domestic currency, or any foreign
currency, exceeding the amount specified by BNM
Under section 17(1), banks are obliged to maintain all records
for a period of not less than six years from the date an
account has been closed or the transaction has been
completed or terminated. It appears that banks are now
required to record more information than they previously
had to in order to comply with AMLATFA
To ensure compliance with the reporting obligations under
AMLATFA, banks have to establish a compliance program
The compliance program must:
• Establish procedures to ensure high standards of integrity of its
employees and a system to evaluate the personal, employment
and financial history of the employees;
• Establish on-going employee training programs and
instruct employees on their responsibilities; and
identify and verify customers
• Develop an independent audit function to check and test the
effectiveness of the compliance program (s19(2))
AMLATFA also requires banks to designate a compliance officer, at
management level in each branch and subsidiary to report
suspicious transactions to FIU (s19(4)).
AMLATFA requires banks to develop audit functions to evaluate
policies, procedures and controls to test compliance with the
measures taken by banks and the effectiveness of the measures in
combating money laundering activities
AML laws emphasize good corporate governance and senior
management accountability. An empirical study of factors
affecting money laundering in 88 developed and developing
countries has shown that an efficient AML framework with good
governance lower the pervasiveness of money laundering
activities
Section 22 (4) explicitly provides that failure of an officer to take
reasonable steps to ensure compliance with Part IV, or failure of the bank
to implement any urgent action plan to ensure compliance, will result in
the officer or officers being personally liable to a fine not exceeding
RM100, 000 or to imprisonment for a term not exceeding six months or to
both. In the case of continuing offence, a further fine may be imposed on
the banks not exceeding RM1,000 for each day during which the offence
continues after conviction
Section 21(2) provides that upon the recommendation of FIU, BNM may
revoke or suspend the bank’s license if it has been convicted under
AMLATFA
Section 92 of empowers BNM to compound, with the consent of the Public
Prosecutor, any offence under AMLATFA or its regulation by accepting from
the person reasonably suspected of having committed the offence such
amount not exceeding 50 percent of the amount of the maximum fine for
that offence, including the daily fine, if any, in the case of a continuing
offence
It must be borne in mind that apart from the potential
significant penalties from FIU and BNM, non-compliance with
the AML obligations may also affect a bank’s reputation.
2004, Riggs Bank was fined $25 million by the US Office of the
Comptroller of the Currency for willfully violating its legal
obligations to implement adequate anti-money laundering
measures
In 2003, Abbey National was fined £2.3 million by the UK
Financial Services Authority for serious AML compliance failure
The issue concerning compliance program is the lack of
AML training given to the staff
In the UK, 13% of respondents admitted they had not received
any training in money laundering identification or prevention.
A further 20 percent had received very poor or unsatisfactory
training
In Australia, only 32.2 % of respondents had received antimoney laundering training

Más contenido relacionado

La actualidad más candente

E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...
E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...
E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...Jitske de Bruijne
 
Presentation AML
Presentation AMLPresentation AML
Presentation AMLMirsazzad
 
Anti Money Laundering Presentation
Anti Money Laundering PresentationAnti Money Laundering Presentation
Anti Money Laundering PresentationAudrius Sapola
 
How to Improve Anti-Money Laundering Investigation using Neo4j
How to Improve Anti-Money Laundering Investigation using Neo4jHow to Improve Anti-Money Laundering Investigation using Neo4j
How to Improve Anti-Money Laundering Investigation using Neo4jNeo4j
 
Chapter 6 anti-money laundering and counter-terrorist financing
Chapter 6   anti-money laundering and counter-terrorist financingChapter 6   anti-money laundering and counter-terrorist financing
Chapter 6 anti-money laundering and counter-terrorist financingQuan Risk
 
Anti money laundering
Anti money launderingAnti money laundering
Anti money launderingUttma Shukla
 
Anti-money laundering presentation
Anti-money laundering presentationAnti-money laundering presentation
Anti-money laundering presentationElias Mose
 
Money Laundering by Vivek Singh,Aryan College
Money Laundering  by Vivek Singh,Aryan CollegeMoney Laundering  by Vivek Singh,Aryan College
Money Laundering by Vivek Singh,Aryan CollegeAryan Ajmer
 
Amla traning (2014) 180714
Amla traning (2014) 180714Amla traning (2014) 180714
Amla traning (2014) 180714Nurul Amira
 
Aml / anti money laundering
Aml / anti money launderingAml / anti money laundering
Aml / anti money launderingSAMBIT SWAIN
 
Knowyourcustomer
KnowyourcustomerKnowyourcustomer
Knowyourcustomermohitronnie
 
Presentation on Money laundering
Presentation on Money launderingPresentation on Money laundering
Presentation on Money launderingPrasanna Hegde
 

La actualidad más candente (20)

E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...
E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...
E-book: How to manage Anti-Money Laundering and Counter Financing of Terroris...
 
Presentation AML
Presentation AMLPresentation AML
Presentation AML
 
Money laundering
Money launderingMoney laundering
Money laundering
 
Anti Money Laundering Presentation
Anti Money Laundering PresentationAnti Money Laundering Presentation
Anti Money Laundering Presentation
 
How to Improve Anti-Money Laundering Investigation using Neo4j
How to Improve Anti-Money Laundering Investigation using Neo4jHow to Improve Anti-Money Laundering Investigation using Neo4j
How to Improve Anti-Money Laundering Investigation using Neo4j
 
Chapter 6 anti-money laundering and counter-terrorist financing
Chapter 6   anti-money laundering and counter-terrorist financingChapter 6   anti-money laundering and counter-terrorist financing
Chapter 6 anti-money laundering and counter-terrorist financing
 
Anti money laundering
Anti money launderingAnti money laundering
Anti money laundering
 
Money laundering
Money laundering Money laundering
Money laundering
 
Anti-money laundering presentation
Anti-money laundering presentationAnti-money laundering presentation
Anti-money laundering presentation
 
AML presentation
AML presentationAML presentation
AML presentation
 
Money laundering
Money launderingMoney laundering
Money laundering
 
Money Laundering by Vivek Singh,Aryan College
Money Laundering  by Vivek Singh,Aryan CollegeMoney Laundering  by Vivek Singh,Aryan College
Money Laundering by Vivek Singh,Aryan College
 
Money Laundering
Money Laundering Money Laundering
Money Laundering
 
Money Laundering and Corruption
Money Laundering and CorruptionMoney Laundering and Corruption
Money Laundering and Corruption
 
Money Laundering Presentation
Money Laundering PresentationMoney Laundering Presentation
Money Laundering Presentation
 
Amla traning (2014) 180714
Amla traning (2014) 180714Amla traning (2014) 180714
Amla traning (2014) 180714
 
Aml / anti money laundering
Aml / anti money launderingAml / anti money laundering
Aml / anti money laundering
 
Aml & kyc
Aml & kyc Aml & kyc
Aml & kyc
 
Knowyourcustomer
KnowyourcustomerKnowyourcustomer
Knowyourcustomer
 
Presentation on Money laundering
Presentation on Money launderingPresentation on Money laundering
Presentation on Money laundering
 

Destacado

The Challenges of Terrorist Financing in 2015 and Beyond
The Challenges of Terrorist Financing in 2015 and BeyondThe Challenges of Terrorist Financing in 2015 and Beyond
The Challenges of Terrorist Financing in 2015 and BeyondSWIFT
 
Combating the Financing of Terrorism
Combating the Financing of TerrorismCombating the Financing of Terrorism
Combating the Financing of TerrorismSWIFT
 
StubbsGazette Anti Money Laundering E Book
StubbsGazette Anti Money Laundering E BookStubbsGazette Anti Money Laundering E Book
StubbsGazette Anti Money Laundering E BookJames Treacy
 
New Zealand | Anti Money Laundering (Aaron Lloyd)
New Zealand | Anti Money Laundering (Aaron Lloyd)New Zealand | Anti Money Laundering (Aaron Lloyd)
New Zealand | Anti Money Laundering (Aaron Lloyd)Corporate Registers Forum
 
Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...
Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...
Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...StubbsGazette
 
Anti Money Laundering
Anti Money Laundering Anti Money Laundering
Anti Money Laundering Besart Qerimi
 
How to conduct an anti-money laundering (AML) system assessment
How to conduct an anti-money laundering (AML) system assessmentHow to conduct an anti-money laundering (AML) system assessment
How to conduct an anti-money laundering (AML) system assessmentKeith Furst
 
Money laundering
Money launderingMoney laundering
Money launderingsaadiakh
 
Anti-Money Laundering (AML) Risk Assessment Process
Anti-Money Laundering (AML) Risk Assessment ProcessAnti-Money Laundering (AML) Risk Assessment Process
Anti-Money Laundering (AML) Risk Assessment Processaccenture
 
Fingernail Problems - how to tell
Fingernail Problems - how to tellFingernail Problems - how to tell
Fingernail Problems - how to tellguestb6851
 
Great Vision Division Heads
Great Vision Division HeadsGreat Vision Division Heads
Great Vision Division HeadsJayson Lee
 
Formal presentation of terrorist financing2
Formal presentation of terrorist financing2Formal presentation of terrorist financing2
Formal presentation of terrorist financing2Abdulrahman Alzaabi
 
Formal presentation of terrorist financing2
Formal presentation of terrorist financing2Formal presentation of terrorist financing2
Formal presentation of terrorist financing2Abdulrahman Alzaabi
 
AMLMaps Highlights Report jan2017
AMLMaps Highlights Report jan2017AMLMaps Highlights Report jan2017
AMLMaps Highlights Report jan2017Abhishek Bali
 
Amla slide-presenation
Amla slide-presenationAmla slide-presenation
Amla slide-presenationibeingnatural
 
Know More About KYC and Money Laundering Procedure by DHFL
Know More About KYC and Money Laundering Procedure by DHFLKnow More About KYC and Money Laundering Procedure by DHFL
Know More About KYC and Money Laundering Procedure by DHFLDHFL
 
Crowe AML Model Risk Management Whitepaper
Crowe AML Model Risk Management WhitepaperCrowe AML Model Risk Management Whitepaper
Crowe AML Model Risk Management WhitepaperBrett Rosynek
 

Destacado (20)

Malaysian FIU
Malaysian FIUMalaysian FIU
Malaysian FIU
 
The Challenges of Terrorist Financing in 2015 and Beyond
The Challenges of Terrorist Financing in 2015 and BeyondThe Challenges of Terrorist Financing in 2015 and Beyond
The Challenges of Terrorist Financing in 2015 and Beyond
 
Committee of Experts on the Evaluation of Anti-Money Laundering Measures and ...
Committee of Experts on the Evaluation of Anti-Money Laundering Measures and ...Committee of Experts on the Evaluation of Anti-Money Laundering Measures and ...
Committee of Experts on the Evaluation of Anti-Money Laundering Measures and ...
 
Combating the Financing of Terrorism
Combating the Financing of TerrorismCombating the Financing of Terrorism
Combating the Financing of Terrorism
 
StubbsGazette Anti Money Laundering E Book
StubbsGazette Anti Money Laundering E BookStubbsGazette Anti Money Laundering E Book
StubbsGazette Anti Money Laundering E Book
 
New Zealand | Anti Money Laundering (Aaron Lloyd)
New Zealand | Anti Money Laundering (Aaron Lloyd)New Zealand | Anti Money Laundering (Aaron Lloyd)
New Zealand | Anti Money Laundering (Aaron Lloyd)
 
Risk based approach
Risk based approachRisk based approach
Risk based approach
 
Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...
Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...
Anti-Money Laundering and Countering the Financing of Terrorism - StubbsGazet...
 
Anti Money Laundering
Anti Money Laundering Anti Money Laundering
Anti Money Laundering
 
How to conduct an anti-money laundering (AML) system assessment
How to conduct an anti-money laundering (AML) system assessmentHow to conduct an anti-money laundering (AML) system assessment
How to conduct an anti-money laundering (AML) system assessment
 
Money laundering
Money launderingMoney laundering
Money laundering
 
Anti-Money Laundering (AML) Risk Assessment Process
Anti-Money Laundering (AML) Risk Assessment ProcessAnti-Money Laundering (AML) Risk Assessment Process
Anti-Money Laundering (AML) Risk Assessment Process
 
Fingernail Problems - how to tell
Fingernail Problems - how to tellFingernail Problems - how to tell
Fingernail Problems - how to tell
 
Great Vision Division Heads
Great Vision Division HeadsGreat Vision Division Heads
Great Vision Division Heads
 
Formal presentation of terrorist financing2
Formal presentation of terrorist financing2Formal presentation of terrorist financing2
Formal presentation of terrorist financing2
 
Formal presentation of terrorist financing2
Formal presentation of terrorist financing2Formal presentation of terrorist financing2
Formal presentation of terrorist financing2
 
AMLMaps Highlights Report jan2017
AMLMaps Highlights Report jan2017AMLMaps Highlights Report jan2017
AMLMaps Highlights Report jan2017
 
Amla slide-presenation
Amla slide-presenationAmla slide-presenation
Amla slide-presenation
 
Know More About KYC and Money Laundering Procedure by DHFL
Know More About KYC and Money Laundering Procedure by DHFLKnow More About KYC and Money Laundering Procedure by DHFL
Know More About KYC and Money Laundering Procedure by DHFL
 
Crowe AML Model Risk Management Whitepaper
Crowe AML Model Risk Management WhitepaperCrowe AML Model Risk Management Whitepaper
Crowe AML Model Risk Management Whitepaper
 

Similar a Anti-Money Laundering and Counter Financing of Terrorism

Opening & Supervision Of Accounts
Opening & Supervision Of AccountsOpening & Supervision Of Accounts
Opening & Supervision Of AccountsASAD ALI
 
Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)
Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)
Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)Mohammad Ali Jinnah University
 
Communication Actitivy
Communication ActitivyCommunication Actitivy
Communication ActitivySheila Brooks
 
Anti Money Laundering Act - Philippines
Anti Money Laundering Act - PhilippinesAnti Money Laundering Act - Philippines
Anti Money Laundering Act - PhilippinesNikki Enriquez
 
StubbsGazette AML/CFT EBook for Credit Unions
StubbsGazette AML/CFT EBook for Credit UnionsStubbsGazette AML/CFT EBook for Credit Unions
StubbsGazette AML/CFT EBook for Credit UnionsStubbsGazette
 
Stubbs gazette handbook final version
Stubbs gazette handbook final versionStubbs gazette handbook final version
Stubbs gazette handbook final versionJames Treacy
 
Anti Money Laundering's regulation: current aspects and future forecasts
Anti Money Laundering's regulation: current aspects and future forecastsAnti Money Laundering's regulation: current aspects and future forecasts
Anti Money Laundering's regulation: current aspects and future forecastsclaudiotarulli3
 
Regulations Overview.pptx
Regulations Overview.pptxRegulations Overview.pptx
Regulations Overview.pptxZOHAIBABBASI15
 
Preventive Vigilance, Frauds & Security Measures in banks
Preventive Vigilance, Frauds & Security Measures in banksPreventive Vigilance, Frauds & Security Measures in banks
Preventive Vigilance, Frauds & Security Measures in banksAbinash Mandilwar
 
Know Your Customer - Tips and Tricks
Know Your Customer - Tips and TricksKnow Your Customer - Tips and Tricks
Know Your Customer - Tips and TricksIdentityMind
 
6 Money Laundering Cycle (p1-3) by Jason
6 Money Laundering Cycle (p1-3) by Jason6 Money Laundering Cycle (p1-3) by Jason
6 Money Laundering Cycle (p1-3) by JasonJason Wong
 
FinCEN Statement on Providing Banking Services to Money Services Businesses
FinCEN Statement on Providing Banking Services to Money Services BusinessesFinCEN Statement on Providing Banking Services to Money Services Businesses
FinCEN Statement on Providing Banking Services to Money Services BusinessesRyan Renicker CFA
 

Similar a Anti-Money Laundering and Counter Financing of Terrorism (20)

AML KYC.pptx
AML KYC.pptxAML KYC.pptx
AML KYC.pptx
 
Money Laundering Paper
Money Laundering Paper Money Laundering Paper
Money Laundering Paper
 
Opening & Supervision Of Accounts
Opening & Supervision Of AccountsOpening & Supervision Of Accounts
Opening & Supervision Of Accounts
 
Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)
Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)
Anti-Money Laundring, CDD &KYC (Muslim Commercial Bank)
 
Communication Actitivy
Communication ActitivyCommunication Actitivy
Communication Actitivy
 
ACAMs article
ACAMs articleACAMs article
ACAMs article
 
banking acts.pdf
banking acts.pdfbanking acts.pdf
banking acts.pdf
 
Anti Money Laundering Act - Philippines
Anti Money Laundering Act - PhilippinesAnti Money Laundering Act - Philippines
Anti Money Laundering Act - Philippines
 
StubbsGazette AML/CFT EBook for Credit Unions
StubbsGazette AML/CFT EBook for Credit UnionsStubbsGazette AML/CFT EBook for Credit Unions
StubbsGazette AML/CFT EBook for Credit Unions
 
Stubbs gazette handbook final version
Stubbs gazette handbook final versionStubbs gazette handbook final version
Stubbs gazette handbook final version
 
Anti Money Laundering's regulation: current aspects and future forecasts
Anti Money Laundering's regulation: current aspects and future forecastsAnti Money Laundering's regulation: current aspects and future forecasts
Anti Money Laundering's regulation: current aspects and future forecasts
 
Anti
AntiAnti
Anti
 
Regulations Overview.pptx
Regulations Overview.pptxRegulations Overview.pptx
Regulations Overview.pptx
 
Preventive Vigilance, Frauds & Security Measures in banks
Preventive Vigilance, Frauds & Security Measures in banksPreventive Vigilance, Frauds & Security Measures in banks
Preventive Vigilance, Frauds & Security Measures in banks
 
Know Your Customer - Tips and Tricks
Know Your Customer - Tips and TricksKnow Your Customer - Tips and Tricks
Know Your Customer - Tips and Tricks
 
6 Money Laundering Cycle (p1-3) by Jason
6 Money Laundering Cycle (p1-3) by Jason6 Money Laundering Cycle (p1-3) by Jason
6 Money Laundering Cycle (p1-3) by Jason
 
FinCEN Statement on Providing Banking Services to Money Services Businesses
FinCEN Statement on Providing Banking Services to Money Services BusinessesFinCEN Statement on Providing Banking Services to Money Services Businesses
FinCEN Statement on Providing Banking Services to Money Services Businesses
 
Money Laundering
Money LaunderingMoney Laundering
Money Laundering
 
Money Laundering
Money LaunderingMoney Laundering
Money Laundering
 
Article 15
Article 15Article 15
Article 15
 

Último

HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHelene Heckrotte
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..dlewis191
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023Steve Rader
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakEditores1
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Winbusinessin
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024Stephan Koning
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfCharles Cotter, PhD
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...Brian Solis
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...Khaled Al Awadi
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGlokeshwarmaha
 
Cracking the ‘Business Process Outsourcing’ Code Main.pptx
Cracking the ‘Business Process Outsourcing’ Code Main.pptxCracking the ‘Business Process Outsourcing’ Code Main.pptx
Cracking the ‘Business Process Outsourcing’ Code Main.pptxWorkforce Group
 
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003believeminhh
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinAnton Skornyakov
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessAPCO
 

Último (20)

HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptxHELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
HELENE HECKROTTE'S PROFESSIONAL PORTFOLIO.pptx
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..Team B Mind Map for Organizational Chg..
Team B Mind Map for Organizational Chg..
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerak
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
 
Cracking the ‘Business Process Outsourcing’ Code Main.pptx
Cracking the ‘Business Process Outsourcing’ Code Main.pptxCracking the ‘Business Process Outsourcing’ Code Main.pptx
Cracking the ‘Business Process Outsourcing’ Code Main.pptx
 
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup Berlin
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
 

Anti-Money Laundering and Counter Financing of Terrorism

  • 1. UUUK6103 Banking Law and Practice Anti-Money Laundering and Counter Financing of Terrorism Banking and Deposit-Taking Institutions Name Matrick No. Date Lecturers : : : : Punithemalar Hariaratnam GP01285 30 November 2013 (Saturday) Felo Aminurasyed Mahpop
  • 2. Money laundering is a conversion of criminal income into the assets that cannot be traced back to the underlying crime ~ Reuter & Truman
  • 3. • • • Al Capone notorious Chicago gangster Started in 1920s, official in 1980s Criminals earning huge amounts of money from drug trafficking, weapons smuggling and extortion need to show an legitimate source of income Embarked on laundering process
  • 4. • Filtering Black market deals paid in cash divided in small deposits to avoid and large and conspicuous bank deposits • Illegal activities Banking Gambling Precious metals and luxury item Change hands enough time that origin become untraceable Filtered through fake companies Casinos nightclub restaurants • Investment Property market Art Hard to access in today’s global economy IMF 2-5% gdp linked to black market
  • 5. Terrorism Financing Sept 11 incident highlighted the association of money laundering with terrorism financing activities According to FATE, terrorism financing comes from 2 primary sources • support by states of specific entities • personal donations, (money laundering activities)
  • 6. • It became immensely important for banks and financial institutions to provide an effective system to deal with suspicious transaction • The Bank of Credit and Commerce International (BCCI) collapse in 1991, the Citibank and Bank of New York scandals in 1999 and the Riggs Bank scandal in 2002 have exposed the danger posed by money laundering to the banking system • The scandals reveal that even the worlds best known banks have become the central elements in MONEY LAUNDERING • Without implementation of anti money laundering measures, banks may find themselves either directly or indirectly assisting money launders
  • 7. If this continues • Customer lose confidence • Threat to honest financial institutions to prove their good standing • Suffer reputational risks • Increase internal fraud & criminal activities
  • 8. Malaysia passed the Anti-Money Laundering and Anti-Terrorism Financing Act in 2001. AMLATFA is implemented by multi-law enforcement authorities led by the Bank Negara Malaysia (BNM) As at July 2010, 94 money laundering cases are in various stages of prosecution in Malaysia with more than 3000 charges involving proceeds amounting to RM1.2 billion AMLATFA criminalizes money laundering and requires banks to put in place proper identifying, recording and reporting procedures; appoint money laundering reporting officer; make staff aware of the AML laws and provide proper training
  • 9. The main reason for bank’s existence is to make as much profits as possible AML laws create a major dilemma for banks as they produce a significant shift in the way banks interact with their customers Implementation of the laws not only creates significant compliance problems for banks, but also has the potential to adversely affect the operations of the banks
  • 10. Reporting Obligations Under AMLATFA • • • • • obligation to report cash suspicious transactions identify and verify customers keep records establish AML compliance program
  • 11. In November 2006, BNM as the Malaysian AML regulator issued two sets of guidelines, namely • Standard Guidelines on Anti-Money Laundering and • Counter Financing of Terrorism (Standard Guidelines) and Sectorial Guidelines 1 for Banking and Financial Institutions These Guidelines are in line with the international anti-money laundering standards issued by the Financial Action Task Force (FATF) It is an inter-governmental body with 36 members and with the participation of over 180 countries through a global network of FATF-style regional bodies
  • 12. Section 14 requires the banks to submit two types of reports. The first type of report is the Cash Transaction Report (CTR). Under section 14(a) banks must report to the Financial Intelligence Unit (FIU) any transaction that exceeds the specified threshold amount Section 13(4), banks are required to aggregate multiple cash transactions in a day that exceed the threshold amount as a single transaction if they are undertaken by, or on behalf of, one person.
  • 13. The second type of report that banks have to submit is the Suspicious Transactions Report (STR). STR refers to a piece of information which alerts law enforcement that certain activity is in some way suspicious and might indicate money laundering. Under section 14(b), a STR should be made when the identity of the persons involved, the transaction itself, or any other circumstances concerning the transaction, gives rise to suspicion.
  • 14. Section 16(1) requires the banks to maintain accounts in the name of accounts holders and prohibits the opening of anonymous accounts or accounts which are in a fictitious, false or incorrect name Sub-section (2) requires the banks to verify the identity of the account holder, the identity of the person in whose name the transaction is conducted as well as the identity of the beneficiary of the transaction Section 5(1) specifies that customer due diligence measures must be conducted when there is a suspicion of money laundering or when there is a doubt about the veracity or adequacy of information on the identity of the account holder which it has obtained previously Section 5(2) (b) requires the banks to identify and verify the identity of the beneficial owner of its customer
  • 15. This view has been proven correct when it was reported in 2006 that failure to identify and verify a customer can result in the dismissal of staff by a bank. This can be seen in the Industrial Court case of Southern Bank Berhad v. Yahya Talib
  • 16. Section 13(1) requires banks to keep a record of any transaction involving domestic currency, or any foreign currency, exceeding the amount specified by BNM Under section 17(1), banks are obliged to maintain all records for a period of not less than six years from the date an account has been closed or the transaction has been completed or terminated. It appears that banks are now required to record more information than they previously had to in order to comply with AMLATFA
  • 17. To ensure compliance with the reporting obligations under AMLATFA, banks have to establish a compliance program The compliance program must: • Establish procedures to ensure high standards of integrity of its employees and a system to evaluate the personal, employment and financial history of the employees; • Establish on-going employee training programs and instruct employees on their responsibilities; and identify and verify customers • Develop an independent audit function to check and test the effectiveness of the compliance program (s19(2))
  • 18. AMLATFA also requires banks to designate a compliance officer, at management level in each branch and subsidiary to report suspicious transactions to FIU (s19(4)). AMLATFA requires banks to develop audit functions to evaluate policies, procedures and controls to test compliance with the measures taken by banks and the effectiveness of the measures in combating money laundering activities AML laws emphasize good corporate governance and senior management accountability. An empirical study of factors affecting money laundering in 88 developed and developing countries has shown that an efficient AML framework with good governance lower the pervasiveness of money laundering activities
  • 19. Section 22 (4) explicitly provides that failure of an officer to take reasonable steps to ensure compliance with Part IV, or failure of the bank to implement any urgent action plan to ensure compliance, will result in the officer or officers being personally liable to a fine not exceeding RM100, 000 or to imprisonment for a term not exceeding six months or to both. In the case of continuing offence, a further fine may be imposed on the banks not exceeding RM1,000 for each day during which the offence continues after conviction Section 21(2) provides that upon the recommendation of FIU, BNM may revoke or suspend the bank’s license if it has been convicted under AMLATFA Section 92 of empowers BNM to compound, with the consent of the Public Prosecutor, any offence under AMLATFA or its regulation by accepting from the person reasonably suspected of having committed the offence such amount not exceeding 50 percent of the amount of the maximum fine for that offence, including the daily fine, if any, in the case of a continuing offence
  • 20. It must be borne in mind that apart from the potential significant penalties from FIU and BNM, non-compliance with the AML obligations may also affect a bank’s reputation. 2004, Riggs Bank was fined $25 million by the US Office of the Comptroller of the Currency for willfully violating its legal obligations to implement adequate anti-money laundering measures In 2003, Abbey National was fined £2.3 million by the UK Financial Services Authority for serious AML compliance failure
  • 21. The issue concerning compliance program is the lack of AML training given to the staff In the UK, 13% of respondents admitted they had not received any training in money laundering identification or prevention. A further 20 percent had received very poor or unsatisfactory training In Australia, only 32.2 % of respondents had received antimoney laundering training