A Practical Approach to Managing an Anti-Money Laundering Program

Registration Process: 8:30 AM – 9:00 AM

Session Start Time: 9:00 AM

• Introduction
• Criminal activities
• Typology of economic corruption
• The impact of corruption
• Why money laundering is a problem
• Money Laundering
• Examples of money laundering
• The concept
• Terrorist financing
• The legal framework
• Classic Money Laundering Methods
• Classic
• The Loan Back
• The Money Broker Shuffle
• Money Laundering – the Detail
• What is money laundering?
• Placement and its various forms
• Layering
• Integration
• How Banks Fit In
• Why banks are so important
• Bank risk areas
• High-risk countries
• Depositing laundered funds
• Suspicious signs
• Suspicious sale of monetary instruments
• Suspicions currency exchange
• Safe deposit
• Money laundering account activity
• Offshore transactions
• Wire transfers
• International correspondent accounts
• Private banking
• Trusts
• Payable through accounts
• Lending
• Letters of credit
• Discount Brokerage, Securities and Investment
• Securities
• Insurance
• Bank employees and agents
• New money laundering schemes
• Financial Action Task Force (FATF)
• FATF’s role
• The 40 Recommendations
• The 9 Special Recommendations
• CASE STUDY: Training - The Key to a Successful AML Program

In this case study we take a close look at how Kenya’s M-PESA mobile money system handles staff training. This case study clearly illustrates how the various AML principles are built into the training program. The case study includes a detailed discussion and exercise.

• CASE STUDY: Sanctions Screening – Part 1

We examine the concept as sanctions screening and the role it plays in countering money laundering and terrorist activities. We deal at length with laws and the reporting of suspicious activities using the United States as the basis for our review. The case study includes a detailed participant discussion.

• Investigating Suspicious Transactions
• The investigation process
• Documenting the findings
• Concluding the investigation
• The Suspicious Transaction report
• What regulators need to be concerned about

• Bank Examination Techniques
• The examiner’s role
• The bank’s compliance program
• Compliance program elements
• Senior management commitment
• Internal audit program
• Compliance officer
• Training
• Bank examination approaches
• Examining the bank’s compliance program
• High risk areas
• Review of internal audit
• CASE STUDY: Sanctions Screening – Part 2

Building on Part 1 of this case study from day 1 we look a six recent cases of global banks who were found guilty of contravening sanction screening activities through the infamous process of “payment stripping”. We conclude with a participant discussion.

• Transaction Testing
• Examining transactions – in this section we look at what transactions need to be scrutinized and what we need to be suspicious of.
• Transaction types covered include: cash, wire transfers, international correspondent accounts, sale of negotiable instruments, safe custody, deposit boxes, lending, private banking, foreign exchange procedures, letters of credit, investments, insurance, Internet banking
• Important people – Potentiates, Foreign Heads of State, Military Commanders, State Officials.
• Reporting your findings
• Non-Bank Organizations
• Who they are
• Regulations relating to these organizations
• CASE STUDY: Fire & Ice – A case of two extremes

This case study looks at global HSBC bank and examines two separate incidents of potential/actual money laundering activities, how they were and were not handled allowing us to draw some powerful lessons. This case study is wide ranging and covers such issues as;

• Suspected money laundering activities
• Mexican drug barons
• Dealings with Iran
• Suspicious travelers cheques

The case study includes a detailed discussion and exercise.

• Practical Tips in AML Management
• Bank officers: Do’s & Don’t’s
• What KYC means …. And what it does NOT mean!
• Advantages of KYC standards
• Core elements of KYC
• Measures to deter money laundering
• Suspicions transactions and their red flags
• Customer Due Diligence – FAQ
• The Customer Due Dillignce (CDD) formula
• Main elements of a KYC program
• Major areas of verification difficulty
• Concluding Case Studies and Discussion

To wrap up the course we offer four separate, but distinctive, case studies – from the US, the UK, Kenya and South Africa. For each study we present the participants with the facts and then we pose a series of questions on each case.

The ensuing discussions will allow participants to use their newly gained knowledge of money laundering and terrorist financing to draw the right conclusions to this intensive two-day program.

Stanley Epstein has had extensive experience in banking and IT specifically the operations, payments, RTGS and the operational risk aspects of banking in the UK, Europe, the USA, Australia and Southern Africa. His bank-operations, payments systems, operational risk and clearing house experience is wide ranging and includes working closely with organisations such as UNCITRAL, Deutsche Bank and CHIPS in New York; APACS, British Bankers Association, CLS and Barclays Bank in London; Crédit Agricole in France; UBS and Credit Suisse in Switzerland, the central bank in the Netherlands; Alpha Bank in Greece; the central bank in Romania; the central bank in Kazakhstan; Bank Leumi and the central bank in Israel; the Standard Bank, Clearing Bankers Association; Bankserv and the central bank in South Africa and ANZ and Commonwealth Bank in Australia.

Commencing his career at the Standard Bank of South Africa he gained a thorough grounding in all aspects of banking ranging from the bank’s branch system, back-office payments processing. He was also closely involved in the development of electronic banking at the Standard Bank. At a banking industry level he was involved in the creation and development of STRATE (Central Securities Depository in South Africa dealing with the dematerialization, clearing and settlement of all financial instruments in that country. He also served as Vice Chairman of the South African Clearing Bankers Association’s ERAG Group (an interbank payments/operations risk initiative established to identify & eliminate operational, legal and other risks in electronic payments) and later as Chairman of the Payments Association of South Africa Operational Risk Committee. On leaving South Africa he joined Fundtech Corporation, a leading provider of financial technology based in the US.

Stanley has a Master’s degree in Economics which he earned with a dissertation on Financial Innovation and a Bachelor of Commerce degree in Accounting.