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The management of money laundering and other financial crime aspects of any business relies on four discrete viewpoints: law and regulation, information flows, understanding people and understanding the organisation
To successfully manage AML/CFT and other financial crime risk, it is essential to understand these, to incorporate them into systems that are both robust and, insofar as is possible, non-intrusive. The objective of all financial crime risk management systems is to protect the organisation and its staff against the activities of criminals and the widespread risks created by laws and regulation - and to do it in such a way as does not interfere with business as usual. That objective is impossible but to aim at it is the guiding principle of how I view law and regulation and how I approach the design, implementation and enforcement of internal compliance and risk management systems.
All too often, banks, insurance companies, securities houses and other businesses in the regulated sector are encouraged to view money laundering, etc. risk management in isolation. That is flawed. All too often, they are told that they must have dedicated information and risk management systems but that with appropriate analysis and planning is rarely so.
So far as I am aware, since 1994, only one of our clients has been subject to any form of investigation: the directors, personally, were prosecuted then acquitted, the judge pointedly telling the prosecutor that there was nothing else our client could have reasonably done.
My approach to money laundering, etc. risk management and compliance is to incorporate it within existing structures, to augment those by using existing data and systems and adding as little extra work as possible for both management and staff.
All too often, those in the regulated sector are sold a pre-packaged "solution" as a template manual for management systems and/or a software product, commonly tied to specific hardware.
Worse, those in the regulated sector are encouraged to do "just enough" to comply with law and regulation, despite the mantra that systems should be risk assessed.
I was at the forefront of the move towards money laundering risk management as underpinning compliance: I explained it in my 1996 book "How not to be a money launderer" and have espoused that principle ever since, watching supra-national bodies and regulators endorse, adopt and enforce that view.
In my world, there are a surprisingly small number of people who fully understand the various aspects of an effective compliance system. Of that number, the vast majority are independent or work in loose coalitions with other similarly talented people. Large law firms and large accountancy / management consultancy firms very, very rarely recruit the best talent: indeed, universally, one of their criteria is whether the consultant can cross-sell or up-sell. And while some of the good people have joined big companies, they rarely survive long under the drive to meet targets.
I have undertaken a thorough review of the good and the bad in money laundering law and regulation (published by Complinet / Thompson Reuters Accellus) and am available to assist in the drafting of law, regulation and guidelines for the regulated sector. I have undertaken root and branch reviews of the laws in a number of countries.
I am not an investigator and therefore do not conduct investigations but I have contacts who do and with whom I can liaise and coordinate. I do not conduct due diligence enquiries, except in relation to systems at financial institutions.
I can offer assistance in the following areas:
- A tough, no rules, taboos or no-go areas review of your current policies and procedures and attitudes across the company. As regulators and prosecutors start to look at entire organisations, what they are finding, and taking action against, are shortcomings in governance, supervision (often bizarrely and linguistically flawed termed "oversight") and the lack of both involvement and internal accountability at senior levels, not only in financial institutions but in a wide range of businesses both within and outside the money laundering regulatory network - and subject areas going into a much wider area than money laundering alone: terrorist financing, bribery, corruption and sanctions are the current, primary, areas of concern but this is expected to expand. Get ahead of this with a detailed and completely independent review of what's happening in your organisation, with nothing sacred except the truth.
- Know Your Client / KYC / Due Diligence systems design and implementation
- Know Your Correspondent Bank - examination of / due diligence on systems of banks in foreign jurisdictions
- assistance with drafting laws and regulations
- advice and assistance on design and implementation of counter-money laundering systems for financial services businesses
- strategy sessions for directors and partners, compliance officers and money laundering risk / reporting officers
- design of training programmes
- writing money laundering related sections of compliance manuals and induction programmes
- preparation of internal forms
- monitoring and audit of compliance systems
- assisting compliance teams in resolving conflicts between regulatory and legislative regimes in one or more countries
- confidential "sounding board" discussions for senior compliance staff to assist in development of and applications for funding for counter-money laundering systems
- independent, impartial advice and assistance for governments on the drafting of counter-money laundering laws and regulatory regimes.
- coordinating litigation in recovery actions including case management and working with your external lawyers and internal teams in a strategic role both domestically and internationally - including orders to freeze money or assets.
- working with investigation teams to identify and recover proceeds of illegal or unlawful actions by staff or third parties.
- coordinating civil and criminal proceedings
- Packaging cases for submission to prosecuting authorities.
Everyone boasts about their client list, right?
Wrong. Not everyone. I don't.
A fundamental principle of The Anti Money Laundering Network's relationship with our consultancy clients is that our involvement with them is completely confidential.
Maybe it's the professionalism of the old fashioned lawyer or maybe it's just the belief that your business is your affair and no one else's.
Rest assured, I will never, ever, reveal any information about my clients: not even their names.
It doesn't matter whether we are working on a strategy, on face to face training or on designing and implementing manuals, I will obtain confidential information about your business. And human nature is that, if others know who you are, they will ask about the work I did for you.
So we protect you in the simplest way possible: we do not provide even a slightly ajar door against which someone may push for information.
But we can tell you this: either through the companies in my Group or in private practice, I have advised some of the world's biggest companies and some real heavyweights in financial services and governments. Don't fret just because we don't use their names to advertise our business. Those big fines you see in the news? They were companies that chose to engage someone else.
After all, you wouldn't like us to tell everyone we'd been working for you, would you?
Choosing a consultant
One day, two City types were walking through the park near the zoo and they heard a scream. "Watch out, The lion's loose," yelled a keeper - hiding inside an empty cage. The two City chaps heard the cry and one stopped, took a pair of running shoes from his briefcase and quickly slipped them on.
As they jogged off together, the one in city shoes said to his sneaker-clad pal "you don't think that those shoes are going to help you outrun the lion, do you?"
"No,", said his pal, surging ahead. "But I don't have to outrun the lion, I only have to outrun you."
Some people think that just enough is good enough. And there are some that think that knowing what the law and regulation says is all they need to know to help your organisation build effective counter-money strategies and to provide effective face to face training.
They don't understand, and cannot explain to you and your people, the risks you face and how to manage them. They know all the buzzwords, and they talk convincingly, but they don't have in-depth knowledge of how money launderers operate, the devices they use and the ways they use organisations like yours.
For them, compliance is enough. They think they should just tick boxes to say the essential elements of an anti money laundering compliance system have been met.
In our story, Regulators are the lions. And usually the approach of regulators is that of "devil take the hindmost" - catch the least performing and hope that the rest of the market learns the lesson. Like lions, regulators have a limited capacity to consume what they catch - and often other regulators and agencies are brought in to feed, especially in the USA where state and federal regulators and enforcement agencies often work together.
Often, contrary to regulators, criminals are not looking to feast on the slowest - criminals are looking for the target that is several steps ahead of the slowest. They know that if they choose the slowest, they will soon come to the attention of the regulators and enforcement agencies. But they still need to find somewhere with systems and controls and risk management approaches that are not the very best.
Simply doing better than the worst will not protect you against the bigger risk - that of actually becoming - innocently or not - a money launderer.
If just enough is good enough for you, then there are plenty of people wanting to work for you.
But if you want to go beyond the basics, then you need to talk to me.
I don't just go the extra mile - I go the extra thousands of miles, criss-crossing the world helping organisations and governments like yours. And I've been doing it for much longer than most consultants - even in big firms.
If you just want to outrun your pals, that's fine. If you are happy that the lion is temporarily diverted by catching the slowest, then so be it. Call someone else.
If you want to outrun the bigger risks and threats that don't even have a name yet - fill in the contact form.