Department:

Group Compliance

Country:
GHO

Compliance Excellence program

AML / CTF Training module

Internal

© Legal Name City

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Financial Crime Risks

What we will deal with during this virtual classroom

Money Laundering Terrorism Financing

Today topics

Bribery and Corruption International Sanctions

Coming soon!

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Agenda
IDENTIFY
Regulation - AML/ CTF impact on Life &
Non-Life

Compliance Operating Model

EVALUATE
Risk Based Approach &
Business Risk Assessment

MITIGATE
CDD – SAR – Screening

MONITORING
Second level controls

REPORTING & PLANNING

Annual Report

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The Compliance/ AML Officer must first understand the DNA of the Company
What are the challenges for a good Compliance/ AML Officer and what are the traps to avoid?

The challenge for the Compliance/ AML Officer is to understand what is expected from him and to
put in place an adequate and appropriate risk mitigation measures

There are however a number of risks and traps to avoid

We must make people responsible by

implementing a simple and effective
mitigation measures, this will increase
their ability to identify potential risk

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The Compliance/ AML Officer must first understand the DNA of the Company
What are the challenges for a good Compliance/ AML Officer and what are the traps to avoid?

The challenge for the Compliance/ AML Officer is to understand what is expected from him and to
put in place an adequate and appropriate risk mitigation measures

There are however a number of risks and traps to avoid

We must make people responsible by

implementing a simple and effective
mitigation measures, this will increase
their ability to identify potential risk

Encourage everyone to be responsible, understand the risks

they must manage

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The Compliance/ AML Officer must first understand the DNA of the Company
What are the challenges for a good Compliance/ AML Officer and what are the traps to avoid?

The challenge for the Compliance/ AML Officer is to understand what is expected from him and to
put in place an adequate and appropriate risk mitigation measures

There are however a number of risks and traps to avoid

We must make people responsible by

implementing a simple and effective
mitigation measures, this will increase
their ability to identify potential risk

Encourage everyone to be responsible, understand the risks they must manage

Be supportive working with team spirit as the Compliance Team has crucial
role in making Generali a life-time partner to its customers

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Group Compliance

Giada Conti
Livio Russo
Governance &
Reporting Financial
Crime

Roberta Lacagnina Giuseppe Bresciani

Regulatory Risk Monitoring &
Compliance Control Assurance

Alessandro Busetti Viviana Bucovaz

GHO Compliance Business Integrity

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Our contact
Group Financial Crime Team groupfinancialcrime@generali.com
Please contact us for any support

Fabiola
Prosperini Giovanni De
Berardinis
Livio Russo

Eleonora
Grassi

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Overview
What is Money Laundering?

An activity aimed at disguising the illicit

origin of the proceeds of crime and
creating the appearance that their origin
is legitimate

Money laundering stages

1 PLACEMENT

2 LAYERING

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3 INTEGRATION
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Overview
What is Money Laundering?

Money laundering stages

1 Proceeds are placed

into the financial
system

2 LAYERING

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3 INTEGRATION
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Overview
What is Money Laundering?

Money laundering stages

1 PLACEMENT

2
Proceeds are
separated from their
source in order to
conceal their origin

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3 INTEGRATION
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Overview
What is Money Laundering?

Money laundering stages

1 PLACEMENT

2 LAYERING

3
Proceeds are re-introduced
to the economy through
“normal” transactions or
business activity

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Overview
What is terrorism financing?

The provision or collection of funds, directly or indirectly, with

the intention that they should be used or in the knowledge that
they are to be used, to carry out acts of terrorism

Terrorism financing

SOURCE OF FUNDS
The funds used for terrorist financing do not necessary derive from illegal
activities and often have a legal source

SIZE OF
TRANSACTIONS
The size of TF transactions may be very small
amounts involved are generally much lower than in ML cases

CHALLENGES

Evolving nature of threats at global level

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AGENDA
IDENTIFY
Regulation - AML/ CTF impact on Life &
Non-Life

Compliance Operating Model

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Risk Identification
Regulatory framework
International standard setting bodies, international and regional regulators in the AML/ CTF
Global

Set standards and requirements for risk assessment, customer due diligence, PEPs, ongoing monitoring,
FATF/ GAFI SARs, and other aspects of AML/ CTF mitigation measures
http://www.fatf-gafi.org/

Adopted by the European Parliament in May 2015 and implemented by the State Members in 2017, the IV
AML/CTF EU Directive reflects the updated FATF Recommendations and includes further provisions
European Union

IV EU Directive
related to the domestic PEPs and increased transparency requirements on the beneficial ownership
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015L0849&from=EN

European Union has already adopted the V AML/CTF EU Directive which reinforce even further the
V EU Directive European AML/CTF legal framework

Counsel Regulation On specific restrictive measures directed against certain persons and entities with a view to combating
terrorism
2580/2001
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32001R2580&from=GA

Group AML/ CTF Updated Group AML/ CTF Policy, November 10th 2017, supplemented by Group AML Guidelines and
Policy
Group

Standard Reporting Requirements

Group Policies & Group AML/CTF Policy, AML/CTF reporting standards, Group International Sanction Policy, Group
Procedures International Sanctions Guidelines, AML/CTF and International Sanctions Compliance Program

Local Italian
D.Lgs 231/2007, D.Lgs 109/2007, Provvedimenti Banca d’Italia, UIF, MEF, Regolamento 44 IVASS
example
Local

Local Policies & Local AML/CTF Policy, Local AML/CTF Compliance Progam, Local Regulation of AML/CTF Function, Local
Procedures Enhanced Due Diligence, Procedure Local Screening Procedure

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Risk Identification
Examples of products which may be more exposed to ML/ TF purposes

Please, draw an X on the

products which may be attractive
for ML / TF purposes

Risk/ Asset Life Non-Life

Business
Banking Reinsurance
Management Insurance Insurance

Maney
Laundering

Terrorism
Financing
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Risk Identification
Examples of products which may be more exposed to ML/ TF purposes

Risk/ Asset Life Non-Life

Business
Banking Reinsurance
Management Insurance Insurance

Maney
Laundering P P P X X

Terrorism
Financing P P P P P
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Risk Identification
Examples of products which may be more exposed to ML/ TF purposes

Risk/ Asset Life Non-Life

Business
Banking Reinsurance
Management Insurance Insurance

Maney
Laundering P P P X X

Terrorism
Financing P P P P P
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AGENDA

Compliance Operating Model

EVALUATE
Risk Based Approach &
Business Risk Assessment

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Risk Evaluation
Risk Based Approach & Business Risk Assessment Criteria

The risk based approach allows the business to focus on the most significant
phases of the business that, due to their nature, are exposed to ML and TF risks

Business Risk Assessment Criteria

Distribution
Costumers Products channels Jurisdictions

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AGENDA

Compliance Operating Model

MITIGATE
CDD – SAR – Screening

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Pillars of an AML/CTF Compliance Management System – CMS

Why do we care about AML and CTF?

Protection of the integrity and

stability of the financial system

Collaboration with relevant

Authorities
Requirement to
know the customer

AML/ CTF
Pillars

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Pillars of an AML/CTF Compliance Management System – CMS

Risk mitigation measures

Protection of the integrity and

stability of the financial system

Collaboration with relevant

Authorities
Requirement to
know the customer

AML/ CTF
Pillars

Record Keeping Retrieval of all

customer information
and documentation

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Pillars of an AML/CTF Compliance Management System – CMS

Risk mitigation measures

Protection of the integrity and

stability of the financial system

Collaboration with relevant

Authorities
Requirement to
know the customer

AML/ CTF
Pillars

Detection and
reporting of STRs to Record keeping and
local FIU
Record Keeping
easy retrieval of all
customer information
and documentation

Financial institution must be able to identify and report the suspicious transactions the FIUs

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

PEP is a natural person who performs or has performed a prominent or

senior public position domestically or abroad, or a close family member
of such a person or a close associate of such a person

Natural
Person
Politically
Exposed

What are the ML risks?

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

What are the ML risks?

Natural
Person

Prominent
Power and
public
influence
function

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

What are the ML risks?

Natural Use of the position or influence for

Person personal advantage (i.e. bribery and
corruption)

Prominent
Power and
public
influence
function

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

What are the ML risks?

Natural Use of the position or influence for

Person personal advantage (i.e. bribery and
corruption)

Misuse of insurance products to launder

the proceeds of crime (e.g. bribery
payments)
Prominent
Power and
public
influence
function

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

What are the ML risks?

Natural Use of the position or influence for

Person personal advantage (i.e. bribery and
corruption)

Misuse of insurance products to launder

the proceeds of crime (e.g. bribery
payments)
Prominent
Power and
public
influence
function Potential use of Relatives (i.e. Family) and
Close Associates to conceal illegal funds or
assets belonging to a PEP

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

How to classify them?

Natural
Person

Prominent
Power and
public
influence
function

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Politically Exposed Persons (Domestic & Foreign)

Who is a PEP

How to classify them?

Natural
Person

Business relationships with PEPs must be

considered high risk and must be
approved by a senior manager
Prominent
Power and
public
influence
function

General Director, or a delegated, must approve the acceptance of any new relationship with a PEP, an
existing client becomes a PEP or the beneficiary is a PEP, and also the payouts

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Screening activities
What parties must be checked?

The screening process covers clients and all relevant parties that may expose the Group to
regulatory and reputational risks

Main subjects of the screening Target

Special
Clients Employees Intermediaries Suppliers Safeguard the integrity
entities
of the Group and
The notion of client Generali wants to Brokers and Agents Suppliers may Special requirements
includes both natural employ people who may expose the expose Generali to are needed for certain ensure the highest
persons and legal entities, meet the Group’s high Group to regulatory bribery risk and businesses like Compliance standards
policyholders, insured integrity standards and reputational damage the image Marine or Aviation
people, beneficiaries, risks of the Group
beneficial owners, etc…

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Ultimate Beneficial Owner

How to identify Beneficial Owner?

Receive
company
vitals

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Ultimate Beneficial Owner

Who is the Beneficial Owner

Receive Analyze
company ownership
vitals structure and
percentages

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Ultimate Beneficial Owner

Who is the Beneficial Owner

Receive Analyze Identify

company ownership beneficial
vitals structure and owners
percentages

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Ultimate Beneficial Owner

Who is the Beneficial Owner

Receive Analyze Identify Perform

company ownership beneficial screening
vitals structure and owners on individuals
percentages

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Risk Monitoring
Ongoing monitoring

Ongoing monitoring A
should undertaken on a
risk basis Changes in
customer
information
For example, customers rated D B
High Risk, should be subject
to more frequent reviews of Interaction with Red flags in
both their transactions and the intermediaries Ongoing customer
(banks, brokers, monitoring conduct
CDD information etc.)

Staff being alert

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Record Keeping
Retention of the supporting evidence and information

Customer’s risk classification

Records should be always retained,
including those maintained in an electronic format

Documents used for CDD

Records must be clearly defined and archived in a

Transaction data manner that makes them easily retrievable

Group AML/ CFT Policy: Records must be retained for a minimum period of at least five (5) years, from the
execution of an occasional transaction, or from the termination of the business relationship
Local law and regulations may require a longer retention period (local authorities e.g. FIU)

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Suspicious Transactions Report – STR or SAR

How do you identify a suspicious transaction?

The identification of Suspicious Financial Transaction is one of the important activities to be

conducted by Assicurazioni Generali SpA in producing quality report. Such action is required to
support the efforts of preventing and removing criminal acts of ML and TF as well as securing the
financial system so that it will not be used for illegal purposes

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Suspicious Transactions Report – STR or SAR

How do you identify a suspicious transaction?

A customer purchases an insurance product and wants to pay

a single large premium payment, (when payment is normally
made on annually) or purchase a product whose premiums
appear to exceed their ability to pay

A customer unconditionally accepts

offers of lower payments with an
economic loss in order to receive
the payment money quickly
Complex structures may include
structures in countries which make
it easier to conceal the identity of
the real beneficial owner

All anomalous relationships and transactions, regardless of the amount, and including
attempted transactions, should be reported to the company’s Money Laundering
Responsible Officer “MLRO” and then, if he/she considers it suspicious, to the local
Financial Intelligence Unit (“FIU”)

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AGENDA

Compliance Operating Model

MONITORING
Second level controls

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AML/CTF second level of controls

Importance of the implementation of effective second level controls

Global and local standards required to financial groups to have in place policies, controls
and procedures to mitigate and manage effectively the risks of money laundering and
terrorist financing

Second and third level controls are mandatory and their absence leads to penalties,
even if there are no ML/TF activities

The Compliance/ AML Function shall monitor the regulatory

framework and support the design and the implementation of the
relevant first level controls and must perform second level controls

Relevant consequences for non-compliance including fines up to the 10% of the

global consolidated turnover (EU 4AMLD) and criminal consequences for
individuals and legal entities

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AGENDA

Compliance Operating Model

REPORTING & PLANNING

Annual Report

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Report & Plan

Management Information and Reporting - Annual Report

Every AML/CTF Officer shall provide regular

reports about Group Entity’s AML/CTF activities to Access to
the entity’s AMSB all relevant
Annual Report

information
and
databases
Within the month of March the AML/CTF Function of Group
shall provide a report to its AMSB Entities
must be
granted
to Group
Compliance
A consolidated report shall be provided to the
If requested by Group Compliance, Group Entities shall allow the processing of customer data within the Group for AML/CTF
Board of Directors offorAssicurazioni
purposes and AML/CTF supervision.Generali
Function
by the month of June
Also information on suspicious transactions reported to the local FIUs shall be shared within the Group for AML/CTF purposes
and for AML/CTF supervision.

The Group Compliance Function must be granted access to all relevant information and databases of Group Entities.

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Takeaways

Remain vigilant to possible “red flags”

Comply with local AML / CTF procedures

Report suspicious transactions and behaviours

Avoid discounting concerns about a customer or its

activities. When in doubt, speak to your manager, and
seek advice from your AML Officer

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 Thank you very much!

For any questions please feel free to contact us!

Common Screening Solution

groupfinancialcrime@generali.com

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