Money Laundering & Terrorist Financing

Current and Evolving Standards

Group 1
KIEV: AML/CFT & International Sanctions Seminar

KIEV 24-27 MAY 2016 Adriana Consultancy Consortium

money-laundering
 Session Objectives:

- Brief overview of International Standards

- Changes made to FATF Recommendations

- New EU 4th AML Directive

- FATF and BIS publications

- Relevance of Panama Papers

- Importance of Effectiveness

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

 International Standards

Basel (BIS and BCBS): NEW GUIDELINES

Sound management of risks related to money laundering
and financing of terrorism
February 2016

UN – Conventions Vienna 1988, Palermo 2000,

Suppressing FT 2001

FATF – 40 Recommendations and their interpretative

notes !

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

International Standards

Regional Bodies:
 
 FSRBs like EAG, Menafatf, Moneyval, etc

 EU – Regulations, Directives and Council

Decisions
 
 CoE – 2005 Warsaw Convention

 Private initiatives: Wolfsberg Group

 
KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium
 Reporting Institutions

Financial/Credit institutions
and
Designated Non-Financial Businesses and Professionals
(DNFBP)
-Auditors, accountants, tax advisers
-Casinos
-Real estate agents
-Dealers in high value items
-Trusts, company service providers
-Lawyers, notaries, independent legal professionals

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

Financing of Terrorism
How to prevent terrorists from access to funds?

TF offence to be designated as a ML predicate offence

• Ensure application of existing instruments to fight against

financing of terrorism
• In conformity with international standards including UN
Convention:

Note how Rec 5 criminalised TF on basis of Art 2 of the

Terrorist Financing Convention !

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

 FATF 40 Recommendations

Review undertaken in context of preparation for 4 th

Round of mutual evaluations

Completed in February 2012

Complementary FATF Methodology published in

February 2013 to help evaluate compliance with the
new Recommendations

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

 Key Issues

• Integration of risk-based approach

• Customer due diligence (beneficial ownership)
• Politically-exposed persons
• Intra-group referrals
• Financial institution systems and controls
• Electronic funds transfers
• Tax offences as predicate offences
• Transparency of beneficial ownership of legal persons
and arrangements
• Role of the Financial Intelligence Unit
• Law enforcement powers and procedures
• International cooperation measures

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

 What is coming?
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New 4 AMLD in the European Union:
th
• Second level
Adopted on 16 Dec. 2014 – Must be transposed this summer
Main points:
Implements the new FATF Recs
And
Lowers threshold for high value goods to EUR 7500
Tax crimes as predicate offence
Identification of beneficial owners
Improve effectiveness by ensuring that risk
assessments are carried out.

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

4th EU AML Directive
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• Second level

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

BO – Art 29 4th AML Dir.
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• Second level

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

Pleas for Open Registers BO
Beneficial
Click to editOwnership information‒will:
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• Second level

-allow businesses to know who are behind their partners

- support banks in their due diligence efforts

-allow for immediate access by law enforcement (also in developing

countries)

-allow the public to scrutinise the data and weed out false
information

-be more cost-effective for governments than a closed system

according to two studies (UK and European Commission reports)

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

FATF Publications
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Results Dialogue the Private Sector (see overview dated
• Second level
19/20 April 2016)
• Information Sharing
• Correspondent Banking *
• Terrorist Financing

An Effective System of Combat ML/TF: 7th April 2016

This is a good overview of an effective AML system and
its operation

Financing ISL: Paper dated February 2015

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium
BIS and Wofsberg Publications
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• Second level

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

To improve ?
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Communication and Cooperation

And

National and International Exchange

of Information

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

Effectiveness of the system?
Clicktotomeasure
How edit Mastereffectiveness?
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• Second level
Measure the extent to which the defined outcomes are
achieved.
Does this imply more monitoring, more mutual
evaluations, more supervision, more implementing
rules,
More micro management?
BENEFIT ANALYSIS FORM = BAF
Your homework !!!

KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

Consequences
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KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium

THANK YOU
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Thank
• Second levelyou

Adriana Holtslag-Alvarez

Consultant to the EBRD, London;

Project Leader

adrianaholtslag@gmail.com
KIEV 24-27 MAY 2016 - Adriana Consultancy Consortium