Capacity%20Enhancement%20Program%20on%20Anti-Money%20Laundering%20and%20Combating%20the%20Financing%20of%20Terrorism%20(AML/CFT)

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Capacity Enhancement Program on Anti-Money
LaunderingandCombating the Financing of
Terrorism (AML/CFT)
March 30, 2005
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AML/CFT Global Problem, Global Effort -

• Money laundering and terrorist financing can
  threaten the security and stability, transparency
  and efficiency of financial system.
• US 1 Trillion is laundered every year.
• Strengthening the AML/CFT regimes is important to
  prevent money laundering and terrorist financing.

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Many Positive Implications!

• Enhance financial market integrity
• Enhance efficiency and capacity in detection of
  corruption/bribery and financial fraud schemes
• Discourage growth of the underground economy,
  including tax evasion and tax avoidance
• Increase the tax base and government revenues
• Promote the legitimate private sector
• Improve financial sector supervision by making
  macro-economic date more reliable
• Etc.

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Increasing TA Needs

• Awareness raising
• Legislative and regulatory framework
• FIU
• Financial sector and non-financial businesses and
  professions
• Law enforcement
• Inter-agency and international cooperation
• Etc

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Lessons Learned from the Policy Dialogue Series

• Strengthening the Collaborative Process to build
  effective AML/CFT regime
• The stakeholders include policymakers, judicial
  authorities, law enforcement agencies, FIU,
  financial regulatory and supervisory authorities,
  FIs, NBFIs, IOs
• Dialogues with 24 countries.

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Lessons Learned cont.

• Importance of an effective consultative mechanism
  between public and private sectors.
• Discussion Outcome
• Strong PPP and more dialogue improve decision
  making in particular when authorities understand
  local conditions and the private sector grasps
  the AML/CFT regimes implementation requirements.
  

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Then How?

1. Display commitment and political will
2. Establish a national coordination group
3. Establish an implementation working group
4. Issue clear rules, regulations and guidance notes
5. Launch public awareness campaigns

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Then How?

1. Build trust
2. Develop consultative forums
3. Forge PPP with FIUs and reporting entities
4. Develop a feedback mechanism
5. Establish ongoing training for both public and
   private sectors

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1. Display commitment and political will

• Ensuring true commitment and resolute political
  will
• Demonstrate true commitment in many ways
  regular meetings with the private sector,
  seminars, workshops, dissemination of information
  (web-site), newsletters, awareness raising
  campaigns.

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2. Establish a national coordination group

• High-level interagency committee or council to
  lead a national effort to develop an effective
  AML/CFT regime
• Multidisciplinary approach (stakeholders)
• Develop a national strategy
• Facilitate interagency cooperation
• E.g. National Coordination Committee of Malaysia
  founded in April 2000. 13 ministries and
  government agencies, led by BNM.

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3. Establish an implementation working group

• Sublevel committee/working group/task force
• Monitor progress and mechanism
• Led by FIU or another leading governmental body

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4. Issue clear rules, regulations and guidance
notes

• Regulators/supervisors should provide guidance on
  AML/CFT program requirements (not just
  administrative authority!)
• Ensure legal protection/safeguard provision for
  the private sector
• Develop a risk-based approach for financial
  supervisors and FIs

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5. Launch public awareness campaigns

• Changing the culture and mindset (at many levels
  including FI employees and their clients)
• Consider local aspects
• Highlight the importance of PPP
• Via media (radio, television), and publications
  (pamphlet, newsletters, etc)

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6. Build trust

• Building mutual rust and confidence between
  public and private sector
• How to develop trust?
• Ongoing collaboration with reporting entities
• Open communication
• Consultation with the private sector
• Training and TA to the private sector
• AML/CFT manuals and guidance notes for the
  private sector (Lesson 4)

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7. Develop consultative forums

• Role of professional and industry associations
• Training
• Self-regulations
• Code of conduct
• Organize public-private sector forums new
  trends and typologies, industry concerns, etc.
• Organize FI form share information, find a
  common solution, etc.

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8. Forge PPP with FIU and reporting entities

• Ensuring trustful relationship between FIU and
  reporting entities.
• On-going dialogue through regular meetings
• Consultation with the private sector
• Joint initiatives (seminars, public awareness
  campaigns, etc)

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9. Develop a feedback mechanism

• Provide appropriate feedback to the private
  sector
• Different type of feedback typologies,
  statistics, trends and patterns on ML/FT,
  specific case-oriented information, etc.
• Additional information such as a list of
  terrorist groups, etc.

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10. Establish ongoing training for both public
and private sectors

• Education, education, education!
• Training, training, training!
• Educate all the relevant constituencies
• Institutionalize the training program
• e.g. Egyptian Banking Institute, etc

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AML/CFT in Pakistan

• Draft AML legislation
• Concerned agencies need to build their AML/CFT
  capacity.
• Financial institutions need to comply with new
  regulations.
• Training will play a key role.

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Capacity Enhancement Program on AML/CFT

• Help build institutional capacity to strengthen
  AML/CFT regime.
• Offers tools, skills and knowledge
• Gains comprehensive knowledge on AML/CFT
• Multi-year global program with customized
  deliveries in regions and countries
• Scaling up the training activities to government
  officials and financial and designated
  non-financial sectors, using the technology if
  appropriate.
• Countrys lead AML/CFT agency monitor and
  coordinate the training delivery in various
  government agencies and FIs responsible for
  AML/CFT.

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Comprehensive Training Course as a Base for
Capacity Enhancement

• Comprehensive e-learning covering the following 7
  Modules 1 for FIs as a self-study or a
  facilitated on-line course
• Developmental Implications of Money
  Laundering/Terrorist Financing and International
  Standards
• Legal System and Legislative Requirements in
  Meeting International AML/CFT Standards
• Regulatory and Institutional Requirements for
  AML/CFT Compliance
• Building an Effective Financial Intelligence Unit
• International and Inter-agency Cooperation
• Combating the Financing of Terrorism
• Investigating Money Laundering and Terrorist
  Financing
• AML/CFT Compliance for Financial Institutions

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Module on AML/CFT Compliance for Financial
Institutions

• Summary of Content
• 1.      Understanding what money laundering
  terrorist financing is all about
• 2.      Understanding the international
  Background
• 3.      Key elements of an AML / CFT policy
• 4.      Customer Due Diligence
• 5.      Risk based approach to AML/CFT controls
• 6.      Risk Management
• 7.      Identification of suspicious transactions
  / activity
• 8.      Reporting of suspicious transactions /
  activity
• 9.      Monitoring screening of customers
  transactions
• 10.  Record Keeping
• 11.  Training awareness
• 12.  Compliance Legal
• 13.  Audit Function
•  

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Overview of the Program

• There are 4 phases
• Phase 1 Training of trainers
• Phase 2 Distance learning course Phase 3
  Action Plan
• Phase 4 Global Conference

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Phase 1 Training of Trainers

• Face-to-face workshop
• Focus on reviewing the training course and
  customizing the program to the specific needs of
  a country or region
• Workshop for trainers from FIUs, Financial
  regulators/supervisors, Prosecutors and Law
  enforcement, etc.
• Need nomination of the trainers from relevant
  government agencies.

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Phase 2 Distant Learning Course

• Reaching out to more participants.
• Provides an opportunity to interact with experts
  and colleagues from the region.
• Community of Practice where participants continue
  a discussion via e-mail or on-line to pose
  questions and exchange information.
• Trainers play a key role in facilitating.

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Phase 2 Distant Learning Course

• Audience Policy makers, regulators, financial
  supervisory authorities, prosecutors, law
  enforcement officials, Financial Intelligence
  Unit staff, and financial institution compliance
  staff
• Delivery Mode A blend of e-learning and
  videoconference sessions to provide a live
  discussions.
• Duration Expected to complete one module per
  week but can be flexible.
• Language English and other languages if
  necessary.

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Phase 3 Action Plan

• Develop an action plan (short-term and long term)
• Strategy on delivering training where trainers
  are expected to deliver the training course to
  their own staff or covered institutions.
• Needs assessment on technical assistance and
  training
• Advisory and other assistance by experts during
  the course of implementing the action plan

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Phase 4 Global Conference

• Global conference (face-to-face) in 2007
  (expected)
• Bring together representatives of all the
  countries who participated in the program
• Share experiences in implementing the action
  plans
• Report the lessons learned and challenges faced

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Contact

• Ms. Emiko Todoroki
• Finance and Private Sector Group, World Bank
  Institute/
• Financial Market Integrity Unit, World Bank
• Tel [phone], Fax [phone]
• E-mail etodoroki_at_worldbank.org