Reference no: EM132769750
Question
a) Correspondent Banking includes the provision of services that may include the provision of a current or other liability account, and related services to another financial institution, including affiliates, used for the execution of third party payments and trade finance, as well as its own cash clearing, liquidity management and short-term borrowing or investment needs in a particular currency. It may also simply be an agreement to exchange messages between forms using the SWIFT device. A Correspondent Bank is effectively acting as the respondent's agent or conduit, executing and/or processing payments or other transactions and messages. These customers, and non-customers, may be individuals, legal entities or even other financial institutions.
The Wolfsberg Group 2014
Outline the money laundering vulnerabilities of a correspondent banking relationship. What types of due diligence checks are required prior to and during the course of a correspondent banking relationship?
b) You are the MLRO for a regulated entity, based in a jurisdiction of your choice. One of your responsibilities is to complete a half-yearly review of staff training and awareness for AML purposes. A recent regulatory audit has indicated that there are ‘unacceptable issues in the firm arising from staff failing to follow customer due diligence (CDD) processes and obtaining superficial or incomplete KYC information'.
You have recently completed an analysis of the staff training and awareness, computer-based training (CBT), a one-hour programme for all staff, and notice that some of the board and senior management have not completed this mandatory training.
HR Management Information also indicates that some employees have taken the CBT test four or five times before achieving a ‘pass'.
You have made several appointments to see a number of business directors to discuss their non-completion of CBT tests, but the appointments have been cancelled, allegedly due to ‘pressure of business'.
The regulator has already indicated that there should be ‘role-based' AML and CDD training in the firm but no action has yet been taken by management.
Draft your half-yearly review of AML training and awareness and make recommendations for change. Highlight the responsibility of the Board and Senior Management in terms of AML and focus on the risks to the firm if no action is taken
c) In its report ‘Professional Money Laundering' of July 2018, FATF undertook a project and released a report which concentrated on professional money launderers (PMLs) and how they operate.
PMLs offer specialist professional services to increase the effectiveness, scale, and obscurity of the movements of proceeds of crime and specialise in enabling criminals to evade anti-money laundering and counter terrorist financing safeguards and sanctions in order to enjoy the profits from illegal activities.
The 2018 report concentrated on ‘threats' as opposed to ‘vulnerabilities'. PMLs utilise all money laundering tools and techniques available to them and continue to adapt their methods to take advantage of regulatory and enforcement gaps.
Considering the way in which PMLs operate, what is their impact on the extent of money laundering globally? Analyse, using examples, why the techniques PMLs use that lead to money laundering are difficult to detect.
Attachment:- Assignment question.rar