Stewart McGlynnStewart McGlynnAntiAnti--Money LaunderingMoney LaunderingHong Kong Monetary AuthorityHong Kong Monetary Authority

Common AML DeficienciesCommon AML DeficienciesIdentified during OnIdentified during On--SiteSiteExaminationsExaminations

22

3

Our AdvantageOur Advantage

Reduced risk of serious crime and

terrorism

Better reputation as a good and safe place to do business

Contribution to global and national fair play

Recovery of proceeds of crime

4

Keep Up to Date Keep Up to Date ..

the NCCT process the NCCT process

no longer existsno longer exists

5

Public

Statement

Strategic

Deficiencies

Public

Statement

Counter

Measures

Improving Global Improving Global

ComplianceCompliance

Iran

Democratic Peoples

Republic of Korea

(DPRK)

Cuba

Bolivia

Ethiopia

Kenya

Myanmar

Nigeria

So Tom and Prncipe

Sri Lanka

Syria

Turkey

Algeria

Angola

Antigua and Barbuda

Argentina

Bangladesh

Brunei Darussalam

Cambodia

Ecuador

Honduras

Kyrgyzstan

Mongolia

Morocco

Namibia

Nepal

Nicaragua

Paraguay

Philippines

Sudan

Tajikistan

Turkmenistan

Trinidad and Tobago

Venezuela

Vietnam

Yemen

Zimbabwe

Jurisdiction not making sufficient progress Ghana Indonesia Pakistan

Tanzania Thailand

Source: FATF public statements on 28 October 2011Source: FATF public statements on 28 October 2011

6

Give consideration to Give consideration to

offshore accountsoffshore accounts

7

All local records maintained

Appropriate personnel

Screening

Onshore & offshore booked accounts

Ensure proper actions both on and

offshore

Expectation - Policy and procedures

Law Enforcement RequestsLaw Enforcement Requests

8

Know what the SFC alert Know what the SFC alert

list islist is

and use it!and use it!

9

consent is only a word consent is only a word

NOTNOT a risk a risk

assessmentassessment

10

Undue Reliance on Undue Reliance on ConsentConsent

Not a Clean Bill of Health

Not an indication that there is no risk

Appropriate review expected, irrespective of JFIU feedback

Take appropriate action to mitigate

Expectation of Audit Trail

Continued operation without above

= not acceptable

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What Risk?What Risk?

12

Large Cash Large Cash

Deposits & Deposits &

WithdrawalsWithdrawals

13

Cash Transaction RisksCash Transaction Risks

= Red Flag

Commensurate with Customer

Deposits and withdrawals

Outflow of cash can = high risk

Front-line staff

Monitoring of past transactions

Expectation KYC + Audit Trail

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Ensure your system is Ensure your system is

populated with populated with meaningful meaningful

informationinformation that accurately that accurately describes the customerdescribes the customer

.and his activities.and his activities

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Section 25A(1)Section 25A(1)

Where a person knows or Where a person knows or

suspectssuspects.he shall, as soon as it is .he shall, as soon as it is

reasonable for him to do so disclose that reasonable for him to do so disclose that

knowledge or suspicion,knowledge or suspicion,....

together with any matter on together with any matter on

which that knowledge or which that knowledge or

suspicion is basedsuspicion is based

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Our AML RegimeOur AML Regime

Reduced risk of serious crime and

terrorism

Better reputation as a good and safe place to do business

Contribution to global and national fair play

17

Thank YouThank You

Stewart McGlynnStewart McGlynnTel. 2878 1095Tel. 2878 1095smcglynn@hkma.gov.hksmcglynn@hkma.gov.hk