THE CARIBBEAN ANTI-MONEY LAUNDERING PROGRAMME
A Regional Response in a Global War

Caribbean Anti-Money Laundering Programme
In association with the Caribbean Financial Action Task Force
Funded by the European Union and the Governments of
the United States of America and the United Kingdom


AML Course Outline

1. ANTI-MONEY LAUNDERING LEGISLATIONS

This topic provides an overview on the anti-money laundering laws and regulations affecting the region and tailored to a specific jurisdiction. It will provide an update on legal and judicial matters within the region, as well as discussing some of the major challenges facing the region. The course also discusses the new USA PATRIOT Act of 2001 and its effects on foreign banking organizations.

2. OVERVIEW OF MONEY LAUNDERING, HIGH RISK PRODUCTS AND SERVICES

This topic will define money laundering and covers the three stages of money laundering (i.e. Placement, Layering and Integration). The importance of prevention at the various stages will be stressed. It will also focus on the vulnerabilities relating to various instruments, products and services offered by banks/financial institutions that are used as vehicles for laundering money.
In addition, the concept of “willful blindness” will be discussed.

3. RISK MANAGEMENT AND THE EFFECTS OF MONEY LAUNDERING RISK TO THE FINANCIAL SYSTEM AND NATION

This topic focuses on risk management processes, practices and concepts with particular emphasis on money laundering risk and its impact on the financial system and nation from the point of view of legal, reputational, operational, regulatory and financial risk management perspectives. It also highlights the need for institutions to manage, control and report money laundering risk, emphasizing the need for sound policies, procedures and monitoring tools to detect and deter money laundering.

4. ROLE OF THE SUPERVISORY AGENCIES IN THE ANTI-MONEY LAUNDERING PROCESS, RISK FOCUSED EXAMINATION APPROACH, BANK SECRECY, INFORMATION SHARING AND BEST PRACTICES

This topic will address the role and responsibilities of the regulators in the detection and deterrence of money laundering. It addresses the risk focused examination approach, concepts and methodologies. It will define risk management and outline the four elements of effective risk management, as well as, the processes involved in a risk focused examination, with specific emphasis on bank secrecy/anti- money laundering examination approach. The focus will be on familiarizing examiners on the legal and regulatory provisions of anti-money laws, regulations and guidelines. Special attention will be given to the role of the financial system supervisors and the manner in which information sharing and international cooperation can work in an effort to fight money laundering.

5. DEVELOPING AND IMPLEMENTING A SOUND ANTI-MONEY LAUNDERING COMPLIANCE PROGRAMME

This topic will focus on developing and establishing a programme reasonably designed to combat money laundering. It will discuss the key elements of an effective anti-money laundering compliance programme. This includes, the designation of a person or persons, or committee with responsibility for the firm’s entire money laundering programme; developing written policies and procedures and training of employees. In addition, it addresses the important role of the compliance function in the anti-money laundering efforts. Best practice approaches are also discussed.

6. MANAGING A FINANCIAL INTELLIGENCE UNIT (FIU)

This topic will cover the management and operation of a FIU. It will address the goals and objectives of the unit, in particular, its independence, information gathering, analysis and dissemination process, level of communication and cooperation with legal, law enforcement and regulatory authorities. It will also focus on the types of training, expertise, technology and most importantly, code of conduct/code of ethic of its staff. In addition, reporting requirements, time frames and day to day monitoring will be addressed.

7. KNOW YOUR CUSTOMER (KYC)/ENHANCED DUE DILIGENCE (EDD), KNOW YOUR EMPLOYEE (KYE), POLITICALLY EXPOSED PERSON (PEP) a.k.a. FOREIGN OFFICIAL CORRUPTION AND THE NEW CUSTOMER IDENTIFICATION PROGRAMME (CIP)

The principles of KYC/EDD and KYE will be elaborated. The concept of “willful blindness” will be introduced. Similarly, guidance will be provided to financial institutions regarding Politically Exposed Person (PEP) in applying enhanced scrutiny to transactions by senior political figures, their immediate family and their close associates. This guidance is intended to help financial institutions to more effectively detect and deter transactions that involve the proceeds of government corruption, and thus better protect themselves from being used as a conduit for such transactions. In addition, the key elements of the new CIP programme will be introduced .

8. CURRENCY TRANSACTION REPORTS AND SUSPICIOUS ACTIVITY REPORTS

The role of supervisory agencies in detecting and reporting suspicious activities will be discussed, especially report contents and reporting timeframes. Special attention will be given to procedural issues in handling suspicious transactions to avoid “Tipping Off” of suspects and incurring legal liability. This presentation will be supported by handouts to provide examples of suspicious transactions or pattern of transactions or red flags.

9. TERRORIST FINANCING OPERATIONS AND OTHER MONEY LAUNDERING SCHEMES

The September 11 terrorist attacks caused intense focus on how terrorist move, store and use their money. This topic will explain how terrorist move money, the latest money laundering techniques used by other criminal groups and how financial institutions and businesses serve as laundering vehicles. It discusses the forms and types of terrorist organizations and outlines how dirty money moves through schemes such as the Hawala system. It will also emphasize some recent measures undertaken by government and bank regulators to manage, control and report such activities. In addition, the course also discusses the new USA PATRIOT Act of 2001 and its effects on
foreign banking organizations.

10. CORPORATE GOVERNANCE – The roles and responsibilities of the Board of Directors and Senior Management in Combating Money Laundering

This course focuses on the four tenets of risk management with specific emphasis on the role of the board of directors and management. It addresses the Duty of Care and Duty of Loyalty, willingness, commitment and support by senior management to ensure sound and safe banking practices.

11. INTERNAL CONTROLS AND AUDIT

This topic provides an overview of internal controls and audit. It addresses the COSO framework, risk assessment, control activities (detective and preventative controls), internal and external audit and risk focused examinations. The course also emphasis the concepts of segregation of duties, dual controls etc.

12. FATF/CFATF/CALP INITIATIVES/ROLE & RESPONSIBILITIES

This topic provides an overview of the above organizations. It addresses, the objectives, roles, and responsibilities in combating money laundering. In addition, the course discusses the types of product and services the organizations offer.

13. MONEY LAUNDERING CASES

A number of recent international reported money laundering cases will be discussed to emphasize the risk that money laundering poses to banks, financial institutions and to the nation. Cases include: Russian Money Laundering Operation at The Bank of New York, (“BONY”), The Black Market Peso Exchange (“BMPE”) and Outsourcing Risks associated with compliance, and internal audit functions.