The role and work of an FIU,

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• The role and work of an FIU,
• and the new Financial Intelligence Agency

2

• Objectives-
• To fully understand the role played and
  functions performed by an FIU within the
  anti-money laundering and compliance framework,
  domestically as well as in the international
  arena.
• To provide an overview of the new Financial
  Intelligence Agency.

3

• Outline-
• Types of FIU
• Core functions of an FIU
• International considerations
• Criteria for assessing FIUs
• Work of an FIU
• Domestic international activities
• Overview of the FIA

4

• Types of FIU-
• Administrative
• Law enforcement
• Judicial or Prosecutorial
• Hybrid FIUs
• No international standard on best
• model for an FIU

5

• Administrative FIU-
• Autonomous body
• Acts as buffer between law enforcement
  financial sector
• Can be Regulator or Government Ministry
• May have Supervisory powers
• Could cause delay in law enforcement
  administration
• Insufficient range of legal powers to obtain
  evidence
• Open to possible political supervision or
  interference

6

• Law enforcement FIU-
• Maximum law enforcement use can be made of
  financial disclosure information
• Quicker law enforcement response to money
  laundering other financial crimes
• Easy access to criminal intelligence
  intelligence community
• Tend to be more focused on investigation than
  prevention
• No supervisory powers to audit financial
  institutions need for court orders for material
  and information
• Financial institutions may be reluctant to
  disclose to Police
• Ineffective unit if organisational focus is on
  other areas of policing

7

• Judicial or Prosecutorial FIU-
• Within judicial branch of the state
• Usually found in countries with continental law
  tradition
• Higher degree of independence from political
  interference
• More focused on investigation than prevention
• No Supervisory powers require court order to
  obtain evidence
• Financial institutions reluctant to disclose to
  judicial body

8

• Hybrid FIU-
• Various combinations of administrative, law
  enforcement, judiciary bodies
• Attempts to consolidate the advantages of all
  the elements put together
• Administrative/Law enforcement, or
  Customs/Police, or Judicial/Police
• All members retain and exercise powers of agency
  of origin
• May lead to jurisdictional issues between
  agencies

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• Core functions of an FIU-
• A central, national agency responsible
  for receiving, (and as permitted, requesting),
  analyzing and disseminating to the competent
  authorities, disclosures of financial
  information-
• (i) concerning suspected proceeds of
  crime, and potential financing of terrorism,
  OR
• (ii) required by national legislation or
  regulation,
• in order to combat money laundering.
• Egmont Group definition, 1996 as
  revised 2004
• Revised FATF 40 Recommendations 2003

10

• International considerations-
• United Nations Conventions
• Convention against illicit traffic in narcotic
  drugs and psychotropic substances (Vienna 1988)
• Convention against transnational organized crime
  (Palermo 2001)
• Convention against corruption.
• Convention for the suppression of financing of
  terrorism (1999)
• Also 5 UN Security Council Resolutions

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• International considerations-
• Financial Action Task Force
• 1990 FATF 40 Recommendations identified
  competent authorities, but not defined
• 2003 FATF 40 Recommendations formally defined an
  FIU as being the competent authority in AML/CFT
• An FIU should be established in every country to
  the Egmont Group standard
• 2003 Recommendations mention FIUs specifically
  in 13 and 26. Also competent authority mentions
  in 15, 18, 23, 26, 27, 29, 32.
• 2001 FATF 8 Special Recommendations on TF
  mention FIU competent authority in SR IV.
  Revised 9 SRs in 2004

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• International considerations-
• The Egmont Group
• 1995 first meeting of countries at
  Egmont-Arenberg Palace, Brussels established
  informal FIU network
• Aims to foster development of FIUs worldwide,
  stimulate international co-operation, exchange
  financial intelligence information, joint
  training initiatives, shared expertise
• 106 member countries as of May 2007 with
  recognized operational national FIUs of a
  variety of models at various stages of
  development
• Working Groups and Egmont Committee used to
  conduct common business of group
• Egmont Secure Web facility
• Organisation formalised with Bermuda Charter in
  May 2007

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• International considerations-
• Caribbean Financial Action Task Force (CFATF)
• FATF Style Regional Body (FSRB)
• CFATF 19 Recommendations repealed in 2004
• Adopted the revised FATF 40 Recommendations 2003
  and revised FATF 9 Special Recommendations 2004
  relating to TF
• Regional standard for AML/CFT framework
• Mutual evaluation and country assessment program
  in conjunction with IMF/World Bank FSAP program
  legal framework, international co-operation, FIU
  law enforcement, and financial sector

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• Criteria for assessing FIUs-
• FIUs are assessed on the following
• Operational independence receive, analyze,
  disseminate
• Adequate legal powers
• Access to information on a timely basis
• Protection of information
• Sufficient resources personnel, expertise,
  funding
• Quality of analysis (Strategic Tactical)
• Dissemination of SARs
• Relations and feedback to financial sector - FATF
  best practices
• Co-operation domestically and internationally
• Quality of statistics
• Egmont Group membership

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• International standards - useful websites
• www.namlc.bm
• www.cfatf.org
• www.egmontgroup.org
• www.fatf-gafi.org
• www.un.org
• www.incb.org/e/conv/1988/
• www.bis.org/publ/bcbs85.pdf
• www.imolin.org
• www.imf.org
• www.worldbank.org
• www.fincen.gov/fiuinaction.pdf

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• Work of current FIU in Bermuda-
• Administrative function
• Designated authority to receive, collate,
  analyze, disseminate SARs
• Maintaining a financial intelligence database
• Law enforcement function
• Investigation of SARs money laundering
• Financial investigations for confiscations and
  forfeitures
• Cash seizures
• Overseas enquiries and exchange of information

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• Domestic activities-
• Training
• Liaison with local financial institutions
• Liaison with regulator Bermuda Monetary
  Authority (BMA)
• Representation at National Anti-Money Laundering
  Committee (NAMLC)
• Representation at Association of Bermuda
  Compliance Officers (ABCO)
• Public awareness

18

• International activities-
• Training
• Egmont Group
• Caribbean Financial Action Task Force (CFATF)
• Mutual evaluation and assessment program
• Overseas law enforcement and investigative
  agencies

19

• Overview of new Financial Intelligence Agency
  (FIA)-
• Administrative body and national FIU for Bermuda
• Operates independently both domestically and
  internationally
• Designated reporting authority
• Role is to act as buffer between financial sector
  and law enforcement
• Operations are conducted at pre-investigative
  stage
• Liaison and partnership with Regulator and
  financial community
• Assists with training and advice
• Is an engine for national compliance

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• Overview of FIA functions-
• Core FIU work - Receives, collates, analyses, and
  disseminates financial intelligence
• Analysis at both strategic and tactical levels
• Prepares case packages for law enforcement
• Sanitised sharing of financial intelligence
  whether spontaneously or upon request
• Liaison with domestic agencies foreign
  counterparts
• Maintains financial intelligence database
• Member of NAMLC
• Training and advice
• Prepares statistics and typologies, and
  identifies trends
• Some statutory powers include freezing of funds
  and obtaining information

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Any Questions?
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Gary J. WilsonDetective InspectorBermuda
Police ServiceFinancial Investigation Unit

• Tel [phone]
• Fax [phone]
• E-mail fiu_at_bps.bm