Combating Money Laundering

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Combating Money Laundering

• Anil Mathur
• Merrill Lynch Canada
• June 2005

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Agenda

• The Money Laundering Problem
• Regulatory Requirements
• What Organizations Are Doing About It
• Procedures, Roles, Responsibilities
• How Information Professionals Can Help
• Technology
• QA

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Merrill Lynch

• 35 countries
• Retail and institutional
• Diverse financial institution
• Personal financial planning
• Investment banking and advisory services
• Trading equities, debt, commodities
• Banking and lending
• Insurance
• Research

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The Money Laundering Problem

• What is money laundering anyway?
• Any act or attempted act to disguise the source
  of money or assets derived from criminal
  activity United Nations

• How big a problem?
• 2 to 5 of world GDP or up to US1.5 trillion -
  IMF

• Why should it concern me?

• Allows organized crime and terrorists to profit
  from (or help finance) their activities

• Legal obligation

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The Money Laundering Problem (contd)

• Legally liable for -
• Willful ignorance of source of client assets or
  nature of client transactions
• Failing to report suspected money laundering
  transactions

• Penalties
• In Canada 5 years imprisonment, fine 2 million
  or both

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The Money Laundering Problem (contd)

• Money Laundering involves only cash transactions

• Three stages
• Placement
• Layering
• Integration

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The Money Laundering Problem (contd)

• Money Laundering is a concern not only for
  Financial Institutions but also other types of
  organizations

• Regulatory obligations cover
• Insurance
• Casinos
• Real estate brokers
• Accountants

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Regulation

• Regulatory overview
• Procedures covering
• Know Your Customer (KYC)
• Record keeping and reporting of suspicious
  transactions
• Independent Review
• Establishment of Watch Lists

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What Organizations Are Doing

• Ownership
• Procedures
• KYC
• New Accounts
• Monitor against regulatory watch lists
• Surveillance of account activity
• Escalation of suspicious transactions
• Record keeping

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What Organizations Are Doing (contd)

• Training
• Initial
• Ongoing
• Independent Review

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Final Thoughts

• Role of Information Professional
• Research

• Additional Resources
• http//www1.oecd.org/fatf
• http//www.occ.treas.gov/moneylaundering2002.pdf
• http//www.bis.org
• http//www.fintrac.gc.ca/publications/guide/guide_
  e.asp

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Combating Money Laundering
Questions?