Stewart McGlynn

1
AML Seminar to Accountants - JFIU4 March 2010

• Stewart McGlynn
• Chief Inspector of Police
• Joint Financial Intelligence Unit

2
STR Filing

• Suggested format content detailed in JFIU
  website
• Email
• Fax
• Post
• Verbal (urgency - follow-up by hardcopy)

3
Concerns

• Urgency
• Confidentiality
• Tipping Off
• Crime Report Vs STR

4
Feedback

• Acknowledgement of Receipt
• File Ref.
• Contact Person Details
• Consent / No Consent Letter
• Arrest / Prosecutions / Convictions
• STR Quarterly Analysis Report

5
Case Example 1
US9.7M loan
US10M pledge
Mr. X, Chairman of Board of Directors for ABC
Company
XYZ company
Sole Owner of XYZ company is Mr. X
6
Learning Points

• Effective CDD / KYC
• Good quality STR, allowing JFIU to perform its
  function
• Protection

7
Case Example 2 Good Auditing Practice
Winding-up
Audit
Company X
Fraud and False Accounting
8
Learning Points

• Reported knowledge of Crime Proceeds Fraud
• Crime report could have been made but STR
  acceptable in this case
• Urgency? Unsure? Contact JFIU

9
Case Example 3 Good KYC / CDD
Frequent substantial withdrawals from Bank
account of Company X in Hong Kong
KYC / CDD
By Accountant for Company X
Discovery
Director of Company X wanted in Japan
10
Learning Points

• Common sense, proportionate approach to KYC and
  CDD
• If it looks like a duck.
• No risk of prosecution

11
Think About This

• Poor / Negligible CDD / KYC
• Absence of risk based approach
• Sub Standard STR
• JFIU unable to make assessment
• What would you Think?

12
Country Comparison STR filed by Accountants
Country 2005 2006 2007 Employment in Accountancy in 2008
Singapore 0/2,076 (0) 2/3,290 (0.06) 2/7,621 (0.03) 875
UK 14,567/ 195,702 (7.44) 9,896/ 213,202 (4.64) 8,110/ 220,484 (3.68) N/A
HK 0/13,505 (0) 0/14,557 (0) 3/15,457 (0.02) 3715
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STR filed by Accountants
2005 2006 2007 2008 2009
No. of STR Received 13,505 14,557 15,457 14,838 16,062
Filed by Accountant 0 0 3 6 11
Percentage () 0.00 0.00 0.02 0.04 0.07
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Some Final Thoughts

• JFIU understands the burden that CDD and KYC
  entails
• Law / International Standards
• Increase in quality STRs from the sector
  desirable intelligence is our business
• JFIU is here to help Contact us

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Contact JFIU

• Telephone[phone]
• Fax [phone]
• Emailjfiu_at_police.gov.hk
• MailGPO Box 6555 Hong Kong
• stewartmcglynn_at_police.gov.hk
• Telephone[phone]