C. Rachel Raemore Romijn C. Rachel Raemore Romijn Senior Vice PresidentSenior Vice PresidentCompliance DirectorCompliance Director

Wachovia CorporationWachovia Corporation

    

Fiduciary & Investment Risk Management Association

National Risk Management Training ConferenceApril 2008

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Overview of PresentationOverview of Presentation

Overview of Strong AML Program: WARRCOM – What is it?

Customer Due Diligence in Detail

Assessments in Detail

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USA PATRIOT Act

FINRA

SEC

OCCFRB

BSA

IRS

Alphabet Soup….Alphabet Soup….

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Overview of a Strong Overview of a Strong AML/ATF/OFAC ProgramAML/ATF/OFAC Program

WARRCOMWritten Policies and Procedures

Awareness and Training

Regulatory and Internal Reporting

Record keeping

Customer and Product Due Diligence

Oversight

Monitoring and Assessments

     

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Written Policies and ProceduresWritten Policies and Procedures

Cascading Policies

FFIEC Analysis and 2006 Updates

312 Implementation

     

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Awareness and TrainingAwareness and TrainingEverybody should get something

Web based Training Module

Specialized Focused Training– PEPs– Offshore Companies and Trust– 312

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Regulatory and Internal Regulatory and Internal ReportingReporting

Regulatory Reporting – such as SARs, CTRs, 314, 311

Centralized EscalationScore Card and MIS

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Customer and Product Due Customer and Product Due DiligenceDiligence

Ongoing Monitoring of all ClientsIndependent in-country visits for

certain types of clientsHigh Risk Codes312New Product Committee

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Specific Issues……Specific Issues……In a High Touch SpaceIn a High Touch Space

High Touch Due Diligence Process and Relationship….

So you should know and understand client – get to the warm body

Know and continue to know their reputation

Source of Wealth

Proactively vet PEP risk

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Specific Issues……Specific Issues……In a High Touch SpaceIn a High Touch Space

Mostly Managing Reputational Risk….Not Just AML

Coordinate Actions for or against the client…Red Flag Committee Structure

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OversightOversight

• Management – “How do you know?”

• Compliance & Risk Management

• Internal Audits

• External Audits

• Regulatory Exams

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Monitoring and AssessmentsMonitoring and Assessments

People and Automated Systems

• Assessment Program

• Automated Tools

• Escalation

• Ongoing Due Diligence of Customers and Products

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What is an Assessment?What is an Assessment? Risk Assessment of high risk types

looking at products, customers, and geography

Self Assessments of policies and processes

Risk Matrix and on-going Surveillance

     

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Four Main Elements to AML Four Main Elements to AML Assessment Program:Assessment Program:

WRAPWRAP

W: WARRCOM Quality AssessmentR: Risk Matrix or Score CardA: Audit, Compliance and Regulatory

Examination ResultsP: Policy development based on

Products and Services, Customer Types and Geographies

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Policy Development Based on Products Policy Development Based on Products and Services, Customer Types and and Services, Customer Types and

GeographiesGeographies

Products and Services

Who are you? Customer Types

What do you want? Products and Services

Where are you from? Geographies

     

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(W: WARRCOM Quality Assessment)(W: WARRCOM Quality Assessment)Self AssessmentsSelf Assessments

What does success look like?

How are GAPs resolved and tracked?

Are reports issued?

     

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R: AML Risk Matrix R: AML Risk Matrix

The FactsThe Facts

AML Risk Matrix or Score Card: Incorporate FFIEC Appendix J & M and Additional Questions for all AML Risk Assessment Units

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A: A: Audit, Compliance and Audit, Compliance and Regulatory, Regulatory, Examination Examination ResultsResults

Add Internal Audit ResultsSummarize Compliance Review ResultsAdd Regulatory Results

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Resources:Resources: More than FFIEC Manual More than FFIEC Manual

Securities Industry and Financial Markets Association (SIFMA) Anti-Money Laundering and Financial Crimes Committee 2008 Guidance for Deterring Money Laundering and Terrorist Financing Activity, February 2008

FINRA a Small Firm Template, Anti-Money Laundering Program: Compliance and Supervisory Procedures

SEC Anti-Money Laundering Source Tool

FinCEN’s Guidance, Application of the Requiring Special Due Diligence Programs for Certain Foreign Accounts to the Securities and Futures Industries, May, 10, 2006