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The specialist in highly technical, market-driven financial crime compliance training

Financial Crime Compliance Courses

All courses can be presented In-House or via Live Webinar

web: redliffetraining.co.uk email: [email protected] phone: +44 (0)20 7387 4484

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PUBLIC COURSES

• Anti Money Laundering - Financial Crime Compliance• Trade Based Money Laundering (TBML) & Sanctions

Compliance

IN-HOUSE COURSES

• AML & KYC: The Crime Prevention Compliance Course• Cybercrime and Financial Services• Fraud & Financial Services• The Roles and Responsibilities of the Money Laundering

Reporting Officer• AML Investigations• Financial Crime Compliance Including Counter Terrorism• Cybercrime: An Overview for Non-FinTech Managers


Corporate Membership Scheme

Our Corporate Membership Schemes are not valid on any courses held on an in-house basis and are in line with our standard Terms & Conditions

If you would like to enquire about one of our Corporate Membership Schemes then please call or email us for more information.

Email: [email protected] Tel: +44 (0) 20 7387 4484

Our Corporate Membership Scheme gives clients the benefit of discounted course places with absolutely no

restrictions.

Clients pay an annual subscription fee of £595 + VAT to receive 20% discount on all public course and conference

bookings irrespective of the numbers booked.

You Corporate Membership Scheme can be used once payment is received and will be valid for one year.

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Anti Money Laundering - Financial Crime ComplianceDate: 19-20 Mar 2018, 30-31 Oct 2018

Location: London Standard Price: £1,050 + VATMembership Price: £840 + VAT

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Course Overview

BackgroundThe cost for anti-money laundering compliance in both banking and non-banking institutions is increasing at an exponential rate. Financial crime is becoming highly sophisticated while the global financial ecosystem and regulators are playing catch-up to technology.

Despite tremendous global coordination efforts by the Financial Action Task Force (FATF) on money laundering since its establishment in 1989, less than 1% of the global volume is detected according to the UN. The root cause however lies in the fact that the financial system and regulations are antiquated with today’s sophistication of financial crime and technological opportunities.

Day One - will cover the different development in the market that modifies the process of money laundering and helps doing the compliance function differently.

Day Two - adopts a practical approach to financial crime prevention and cautions on the different pitfalls in financial crime.

Who Should Attend:Officers from both financial and non-financial industries;

1. Banks, Insurance companies, Trusts, Offshore management companies, Investment Companies, Leasing companies, Construction companies & Real Estate agencies, Money changers, IT industry, Gaming Industry, those dealing in precious stones, Stock brokers, Consulting firms, Business owners, Private hospitals, Importers/Exporters, Internet based businesses, and all organisations wishing to limit their money laundering exposure risk.

2. Key players focussing on Financial Crime Prevention measures and establishing a robust systems to combat financial crimes i.e Regulatory bodies, Investigators / Fraud Examiners, Tax officers, Govt officers, Good Governance, Consultants, Risk and Compliance professionals, MLROs, Internal/External auditors, Senior managers and Top management, IT officers, Accountants/Solicitors and other professionals involved in the prevention of financial crimes.

Methods of Money Laundering: ■ Banks - (Case study) ■ Insurance companies - (Case Study) ■ Offshore Vehicles - (Case Study) ■ Trusts - (Case Study) ■ Investment Companies - (Case Study) ■ Money changer - (Case study) ■ Other vehicles behind money laundering ■ Making dirty money clean ■ Predicate Crimes

Financial Crime Prevention Practices and Effectiveness of KYC Policies ■ CDD, KYC & IDV ■ Sanctions ■ Customer Due Diligence. ■ Politically Exposed Persons ■ KYC: Specific Identification & Verification

Issues. ■ Suspicion & Escalation. ■ Managing Methods of Money Laundering ■ Legitimate but Potentially high risk Structures

Case study: The Interaction Between the Risk-Based Approach and Management of

High-Risk Clients

Money Laundering Regulations 2017 ■ Changes ■ General risk assessment ■ Risk mitigation policies ■ Level of due diligence ■ Reliance on third parties ■ PEPs ■ New Criminal Offence ■ Office for Professional Body Anti-Money Laun-

dering Supervision (OPBAS). Risk Based Approach ■ What does this mean ■ How should it work ■ What are the key differences ■ Enhanced Due diligence – what does this

mean

Exercise – the Risk Based Demonstrated and Explained

New emerging trend worldwide to fight financial crime ■ Distributed Ledger Technology ■ Blockchain Technology

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■ Uses/Effects/Advantages in different sectors -private/ Govt /Para-statal Bodies

■ Best Practices Worldwide

Application of Distributed Ledger Technology & Blockchain KYC Solutions ■ Electronic KYC solutions ■ DLT & Blockchain ■ Trust technology

Case Studies – Three separate case studies to illustrate the methodologies/risks

Bulk cash smuggling and mobile technologies ■ Money laundering risks to banking institu-

tions. ■ Money Laundering risks to other non bank-

ing institutions / Govt Sectors ■ Methodology of bulk cash smuggling ■ Red flags which institutions should monitor. ■ Why mobile technology poses the next big

money laundering threat.

Case studies – several to illustrate the risks

Sanctions – Brief Overview ■ Who sets them & why are they set ■ Who is impacted, What are they ■ OFAC ■ How should an institution screen for them ■ Can we adopt a risk based approach when

tolerance is zero?

Electronic AML Solutions ■ Benefits ■ Functional components ■ Internet Banking ■ Internet Casinos ■ Prepaid Cards and E-Cash

Deerisking and AML in the Financial Sector ■ Impact of de-risking ■ From banks to non-banks ■ The Panama Papers fallout ■ Shell companies identified ■ Trusts ■ Bearer Bonds & Securities ■ The inherent risks in doing international

business ■ Processing international ■ Preparedness of financial institutions to

show examiners that there’s a robust due diligence and investigation process in place

■ Identifying these companies and the associ-ated names.

Case Studies

Specific Identification & Verification Issues ■ Trust nominee and fiduciary accounts

■ Corporate vehicles ■ Introduced business ■ Client accounts opened by professional

intermediaries ■ Non face to face customers ■ Introduced business

Terrorist Financing ■ Differences and Similarities between ML

and TF ■ Detecting TF ■ Informal Value Transfer Systems ■ Charities / Non-Profit Organisation

Suspicion & Escalation ■ What must banks have in place ■ An effective escalation process ■ Concern ■ Suspicion ■ Access & Process ■ Communication lines ■ Suspicious Activity Reports / Suspicious

Transaction Report ■ The importance of a direct link ■ Whistle blowing

Risk Based Approach to Managing Methods of Money Laundering ■ Case study on: A Piecemeal Approach to

Financial Crime ■ Case study on: Failure to Connect the

Dots Across Systems ■ Case study on: Cost Driven to the Detri-

ment of Prevention ■ Case study on: Doing Too Little Too Late ■ Case Study on:Neglecting Organizational

Behavior Changes

Cyber Risks – New Technologies ■ Internet Banking ■ Internet Casinos ■ Prepaid Cards and E-Cash

Open Forum Talking Points- ■ AML Policies and Procedures - What is the

difference and why are they important? ■ Probability of an offence crystallising ■ Risk of not reporting ■ Understanding what ML & TF is - dispelling

the myths! ■ Government and other Sanction risk in

practice ■ Understanding the difference between KYC

- ID&V - CDD ■ Profiling customers - what does it mean?

END

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Trade Based Money Laundering (TBML) and Sanctions Compli-ance

Date: 24-25 May 2018 , 09-10 Oct 2018

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Location: London Standard Price: £1,350 +VAT Membership Price: £1,080 +VAT

Whilst trade and commodity finance is low in credit risk it exposes banks to high compliance risks. Banks who have failed to implement adequate Financial Crime Compliance programmes and training have incurred fines, reputational damage and faced the potential loss or suspension of their ability to operate in certain currency markets or jurisdictions. This 2-day course for personnel who are involved in Trade Finance, including bank auditors, compliance officers, operations managers and relationship directors, provides an explanation of the operation of the methods of payment and financing used in international trade and commodity transactions and the nature of associated compliance risks. The course covers all aspects of Financial Crime Compliance (including the regulatory framework) with particular regard to Trade & Commodity Finance (principles and products), Correspondent Banking, International Payments, Global Cash Management, their associated compliance risks and the suspicious money laundering / sanctions violation activity red flag indicators of each. Through attending this course participants will be able to identify compliance risk features in core product areas and key aspects from an audit and compliance risk perspective. The course uses a range of typologies, exercises and case studies to enable the participants to consider transactions and identify the key risk compliance features, areas of due diligence and further information required to make a risk-based assessment

Day 1 Introductions ■ Trainer & participants ■ What do you know? ■ Aims and objectives. ■ Course context.

Financial Crime Compliance ■ Consituent parts (money laundering, ter-

rorist financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compli-

ance risk in cross border transactions ■ Why are international trade transactions

increasingly a target for abuse? ■ The consequences of non-compliance (for

banks, corporates and individuals) Anti-Money Laundering (“AML”) ■ What is money laundering? ■ Why is money laundered? ■ How is money laundered? ■ The key stages of money laundering;

placement, layering, integration ■ Customer Due Diligence (CDD) ■ The risk-based approach to anti-money

laundering ■ Money laundering and terrorist financing

Case study concerning the involvement

of, and consequences for, an international bank which transferred money arising from drug smuggling across three continents.

Countering the Financing of Terrorism (CFT) ■ Key differences between CFT and AML ■ The importance of due diligence and fo-

cussed screening Case study concerning the involvement of, and consequences for, an international bank which was identified as having processed funds used to finance terrorism. Sanctions ■ What are sanctions? ■ Why are they imposed and what is their

intended impact? ■ Who imposes them and on whom are they

imposed? ■ What is the difference between a trade em-

bargo and financial sanctions? ■ Examples of sanctions imposed in recent



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■ years ■ The relevance of due diligence and screen-

ing Case study on sanctions breaches concerning a major UK corporate.

Financial crime also relates to:- ■ Bribery & corruption ■ Tax evasion ■ Proliferation

Facilitation of money laundering ■ Complexity ■ Three stages of money laundering ■ Financial products vs open account ■ Co-mingling ■ Cash ■ Fraud ■ Smuggling ■ Transfer pricing, etc. ■ Capital Flight ■ Foreign Exchange

Examples of legitimising the movement of illicit monies. a) the use of over-inflated invoicing representing “management charges b) misrepresentation of invoice value, multiple invoicing and false description of goods

Correspondent banking ■ What is the role of a correspondent bank? ■ Why is correspondent banking fundamental

to cross border money flows? ■ The counterparty compliance risk of using

Correspondent Banks ■ The use and operation of Nostro, Vostro

and Loro accounts ■ Correspondent banking infrastructure;

• Message authentication; • Provision of payment, trade and treasury

services; • Cash management

■ Risk profile of remitting, receiving and re-imbursement parties in cross border trans-actions

■ Know your customer; the impact of ”KYCC” ■ Key compliance risk zones:

• Ownership and control • Jurisdiction • Quality of jurisdictional regulatory and

supervisory framework • Adequacy of AML and sanctions compli-

ance procedures • Nature of respondent’s business • Client base • Shell banks • Direct access accounts • Downstream correspondents

• Correspondent network rationalisation

Exercise; due diligence and risk considerations

Financial Institutions - as customers: ■ Compliance risk assessment framework; key

components ■ Due diligence and risk assessment ■ Unacceptable customers ■ Monitoring activity – warning signals, red

flags, Financial Action Taskforce (FATF) recom-mendations.

International Payments / SWIFT Messaging ■ The mechanics of cross border funds transfers

and nature of the payment instruction ■ Parties; remitter, originator bank, receiving

bank, beneficiary, cover/reimbursing bank ■ What is SWIFT? ■ What is the function and operation; ■ Understanding the use and role of SWIFT “MT”

message types in payments and trade trans-actions

■ Compliance risk;• Correspondent bank • Message abuse • Inappropriate use of message types

■ Message stripping ■ Methods of international bank transfer:

• Direct and serial processing method (the use of SWIFT MT 103)

• Cover method (the use of SWIFT MT103 plus SWIFT MT202 COV)

• The compliance risk implications of SWIFT MT202

■ Value dating ■ Key compliance risk zones:

• Message information • Originator; ownership, jurisdiction • Beneficiary; ownership, jurisdiction • Nature and value of payment – ordinary

course of business? • Screening – designated persons – sanc-

tioned countries? ■ The compliance risk exposure of US dollar

transfers


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■ High risk customers requiring payment services

■ Red flag suspicious activity indicators

Global Cash Management ■ Examples of global cash management

(concentration/pooling, zero and target balancing)

■ Parties; corporate structures, pool partici-pants and banks

■ Key compliance risk: • Pool participants; ownership, jurisdic-

tion• Nature of business • Correspondent/partner banks • Origin and nature of funds • Co-mingling of legitimate and illicit

monies ■ Monitoring activity – warning signals ■ Compliance risk profile

Case study re corporate group cross border cash concentration arrangement used to disguise illicit funds (from a subsidiary) and recirculation through apparent trade purposes Managing Risk ■ Risk Assessment and due diligence ■ Know your customer (KYC) ■ Red Flags and responsibilities ■ Identifying suspicious activity ■ Regulatory environment ■ Counterfeiting

Video / discussion on CDD, KYC, etc. Case study on the cost of non-compliance re AML and sanctions violation

■ Summary of day’s learning ■ Opportunity to refresh clarify key points,

clarify ■ Review main learning points.

Preparation for day 2 Day 2

■ Review of principal considerations re Fi-nancial Crime Compliance

■ Key learning points form Day1 ■ Any questions / thoughts which have arise ■ Introduction to Day 2

Trade Finance

Trade Transactions ■ Principal parties and associated risks ■ Objectives of principal parties ■ Understanding the trade cycle ■ Additional risks of trading internationally

Description, function and operation: ■ The nature and purpose trade finance ■ What trade finance is and why it is required

Why trade finance carries high compliance risk

■ High risk components (e.g.) ■ Trade finance compliance risk characteristics;

• Counterparties – “know your customer’s customer”

• Parties; different roles of banks; fragment-ed bank involvement

• Transactions; complexity & banks deal in documents – validation?

• Negotiable instruments • Involvement of third parties (agents, carri-

ers, etc) • Jurisdictions / role of finance in cross bor-

der abuse

Comparison between international payments and documentary trade finance in the compliance risk environment: ■ Automated screening ■ Message stripping ■ Manual based due diligence

Trade based money laundering (TBML) ■ Definition ■ FCA Thematic Review ■ Increasing focus of criminal activity ■ Compliance considerations ■ Risk mitigation (KYC; KYCC; information

screening; document checking; red flags; etc.)

■ Common methods of trade based money laundering

Core Trade Finance Products ■ Open Account Trading ■ Trade cycle ■ Incoterms ■ Risk considerations (counterparty, credit,

FCC) ■ Products overview ■ Compliance risk assessment (bank controlled

payment/reimbursement)


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Case study; the assessment of a business transaction, requiring identification of potential risk issues Documentary collections ■ What is a documentary collection? ■ What is the purpose of a documentary

collection? ■ Principal parties and roles ■ Document requirements and purpose ■ Types; sight (DP), usance (DA) ■ URC522 ■ Compliance risk assessment;

• Remitting bank due diligence • Collecting bank due diligence

Case study on the assessment of a potential AML / CFT / sanctions breach documentary credit transaction, requiring identification of key compliance risk issues and the need for further information to make a risk-based assessment

Documentary Letters of credit ■ What is a letter of credit? ■ What is the purpose of a letter of credit? ■ Principal parties and roles ■ Other considerations:-

• The independence principle • Application process • Workability

■ Different types of letter of credit (overview) • Irrevocable / revocable • Unconfirmed / confirmed • Transferable (parties and operation,

compliance risk) • Standby • Revolving • Back to back • Synthetic

■ Trade documentation; vulnerability to abuse and compliance risk

■ UCP 600 ■ Compliance risk assessment; issuance,

presentation of documents, payment; Issuing / advising / negotiating bank; the importance of LC availability

■ Red clause / sanctions clausing ■ Payment terms ■ LC confirmation; financial engagement and

responsibility; discounting

Case study to identify unusual features of a letter of credit request and identify the red flag suspicious activity characteristics

Bank Guarantees ■ What are bank guarantees? ■ Principal parties ■ The characteristics of “on demand” uncondi-

tional guarantees ■ Autonomy and the independence principle ■ Types and use of guarantees in trade (bid, APG,

performance) ■ Direct, indirect and counter guarantees ■ Transferable guarantees; key compliance risks

aspects ■ Foreign laws and usage ■ General compliance risk and vulnerability to

criminal abuse ■ Structuring guarantees to reduce compliance

risk exposure ■ URDG 758

Case study to consider the compliance risk aspects of a request for a transferable letter of guarantee and the further information required to undertake due diligence; use of additional information to identify unusual features and consider an appropriate course of action

Non-core Trade Products and processes

Forfaiting ■ What is forfaiting? ■ Principal parties ■ Primary and secondary forfaiting transactions ■ How to establish debt instrument authenticity ■ The importance of due diligence; is there an

underlying trade transaction?

Commodity Finance ■ Characteristics of commodity finance ■ Key compliance risk zones :

• Emerging markets/high risk jurisdictions • Commodity traders (nature and vulnerability

to compliance risk) • Value and existence of goods

■ Syndicated facilities (due diligence on other lenders/participants)

■ Pre-export & pre-payment finance (high risk environment) • Key compliance risk aspects/deployment of

risk mitigation ■ Warehouse financing

• Parties


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• Key compliance risk aspects/deployment of risk mitigation techniques

• The use and vulnerability of warehouse receipts & role of collateral managers

■ Tolling ■ Key compliance risk considerations

Case study re the use of commodity based pre-payments to disguise the movement of laundered funds

Receivables finance ■ What is receivables finance? ■ Compliance risk vulnerabilities of financing

open account transactions ■ Forms of receivables finance:

• Full factoring • Confidential invoice discounting• Specific insured receivables finance • Reverse factoring

■ The use of receivables finance in the con-text of trade finance

Payables finance / Supply Chain Finance ■ What is payables finance and when is it

used? ■ Principal parties ■ Types of payables finance; description, op-

eration and parties: • Pre-shipment payables finance (suppli-

er-led) • Approved payables finance (buyer-led)

COMPLIANCE CONSIDERATIONS ■ Trade based money laundering character-

istics ■ Vulnerability of cross border transactions to

fraud ■ Information screening ■ Document checking ■ Red flags

Mitigating Risk ■ Know your customer and your customer’s

customer ■ Understand the trade cycle and what is

‘ordinary business’ ■ Compare and contrast ■ Is the complexity of the transaction neces-

sary? ■ Follow the money ■ Apply common sense ■ Ask the right questions ■ The importance of first line of defence ■ Red flags ■ Fraud

■ Summary of day’s learning ■ Opportunity to refresh clarify key points,

clarify ■ Review main learning points.

Conclusion & next steps for action





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Course Content

AML & KYC: The Crime Prevention Compliance CourseIn-House or via Live Webinar

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Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become the key strategic imperatives for all board members. The reputational damage and not to mention the fines imposed for non-compliance are huge concerns.

It is fair to say that banks are being micro-managed by regulators in this area and are being set exceptionally high standards for compliance.

Financial institutions are required to focus increasingly on Financial Crime Prevention measures and must have robust systems in place to combat them.

This includes detailed policies, clear lines of defence, robust CDD processes, a risk based approach, clear accountabilities and above all effective staff training and awareness throughout the organisation.

None of this is difficult but it is costly, time consuming and involves putting in place procedures and systems to deter, detect and protect the institution from being used by criminals.

This course has been designed to deliver best practice guidelines for any institution by drawing on cutting edge experience of what the world’s leading financial institutions are doing, have done and must still do. It covers the minimum requirements, the ideal requirements and considers the impact of imminent legislative and best practice changes.

Who Should Attend?All staff with client facing responsibilities especially those where financial crime is a real and active risk. Risk and compliance professionals and members of the internal audit function. Senior managers and top management would also derive considerable benefit from attending.

Methodology:Workshop style with participation from delegates actively encouraged.

Course Overview

Introduction: ■ What is Financial Crime ■ Predicate Crimes:

• Money Laundering• Terrorist Financing• Evading Sanctions• Tax Evasion• Bribery & Corruption• Fraud• Proliferation

■ What are financial institutions required to put in place – overview

■ What is CDD, KYC, IDV. ■ Who is responsible for FC Compliance? ■ Best Practice/Poor practice ■ Lessons from recent scandals, including

Standard Chartered, BNP Paribas, Lebanese Canadian Bank & HSBC

The Money Laundering Cycle ■ Placement, Layering, Integration ■ How does this work in practice ■ Transaction profile ■ Important KYC framework ■ Operating guidelines

Who sets the rules and who publishes best practice guidelines? ■ FCA ■ UN ■ EEC ■ USA ■ BIS – Basel ■ UK Treasury ■ Local Jurisdictions ■ Best Practice Guidelines

• FATF• Wolfsberg Group

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• Tranparency International• JMLSG• Egmont Group

What must Institutions have in place? ■ The regulatory landscape ■ Rules and Instructions ■ Three lines of defence ■ Escalation process ■ Consent and Tipping Off ■ Risk based due diligence

Sanctions – Brief Overview ■ Who sets them & why are they set ■ Who is impacted ■ What are they ■ OFAC ■ How should an institution screen for them

Risk Based Approach ■ What does this mean ■ How should it work ■ What are the key differences ■ Enhanced Due diligence – what does this

mean

Customer due diligence ■ KYC – getting to know the customer ■ IDV – checking what they say ■ Ultimate Beneficial Ownership ■ PEP’s ■ Source of Wealth ■ Review process ■ Remediation process

Essential Elements of KYC Standards ■ Customer acceptance policy ■ Customer identification ■ General identification requirements ■ The role of supervisors ■ Guidelines for opening accounts ■ Qualitative data ■ Joint accounts ■ Minor accounts ■ KYC for existing accounts

Politically Exposed Persons ■ Definition – formal ■ Definition in practice ■ Why are they a special case ■ Mandatory high risk ■ UBO issues ■ Source of Wealth issues ■ Annual Review issues ■ Imminent changes

Specific Identification & Verification Issues ■ Trust nominee and fiduciary accounts ■ Corporate vehicles ■ Introduced business ■ Client accounts opened by professional

intermediaries

■ Non face to face customers ■ Correspondent banking ■ Introduced business ■ Non face to face customers

Trade Finance & Wealth Management - Overview ■ High risk Areas ■ Specific Issues ■ Typologies ■ KYCC, KYCCB & KYCCBC

Constructing the FCC Framework ■ Policies ■ Roles and Responsibilities ■ Senior Management and M.I. requirements ■ The MLRO (or equivalent) challenge! ■ Risk Assessments and Procedures ■ Suspicious transactions ■ Suspicion & Escalation ■ What must banks have in place ■ An effective escalation process ■ Concern ■ Suspicion ■ Access & Process ■ Communication lines ■ Suspicious Activity Reports ■ The importance of a direct link ■ Whistle blowing

Implementing and Managing the Total FCC framework ■ Due diligence (on-going) ■ Annual Review ■ Record keeping ■ Training ■ Monitoring ■ Reporting ■ Questions/Feedback/Discussion

The Future ■ The FCA Style ■ The impact of FATCA ■ 4th EU Money Laundering Directive

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Cybercrime and Financial ServicesIn-House or via Live Webinar

Course Overview

The Office for National Statistics has said that cybercrimes committed in England and Wales have reached nearly 6 million per year. Reported cybercrimes vary from the sale of narcotics to individuals through the post to attacks between nations on defence, national infrastructure and political targets.

Motives include fraud, long term identity theft, as well commercial and political espionage. The financial services industry forms part of the core commercial infrastructure of the UK and remains a target for both criminally, commercially and politically motivated attacks.

Depending on the nature of their cyber risks, most regulated firms will already have provision in place for the prevention and investigation of cybercrime. However, the methods deployed against firms are constantly evolving.

This course provides an overview of the motives and methods driving the continuing increase in cybercrime and the tactics deployed by firms to frustrate them. It is not a specific course on IT countermeasures, but rather the internal controls firms need to effectively manage cyber risk.

Participants will:

■ Understand the impact of cybercrime and how it threatens the financial services industry ■ Master the key laws regarding computer misuse and fraud as well as the impact of the USA

PATRIOT Act ■ Be aware of how IT, physical and socially engineered methods are used to commit or facilitate

cybercrime ■ Gain a familiarity with the major fraud typologies used by cyber criminals ■ Get to grips with the key security methods used to prevent cybercrime and learn what you can

do to ensure that they are effective

Introduction

■ The annual cost of cybercrime ■ What is cybercrime / cyber-attack?

• Botnets • Denial of service • Device theft • Hacking • Malicious code • Malicious insiders • Phishing, vishing and social engineering • Privilege escalation • Web-based attacks • Zero day vulnerabilities

■ Costs and impacts • Consumer impacts • Impacts on firms

■ Effects on the financial services industry as a whole • Costs to industry • Regulatory impacts

Mini case study: A right royal hack The legal framework ■ Computer Misuse Act

• Section 1 offences (as amended)• Jurisdiction issues

■ Fraud Act 2006 • Section 2,3 and 4 offences

• Secondary offences ■ USA Patriort Act ■ Potential related offences

• Market Abuse • Money Laundering • Terrorist Finances • Theft • Bribery

Case study and team exercise

■ The theft of an identity:• The team will place themselves in the role

of identity fraudster and plan to create a fake identity for use for online fraud.

• What method will the team use to create this identity and to avoid detection?

Criminal behaviours• Organised crime• Opportunistic crime• Internal risks• Fraud typologie

•The Levy report •Emerging typologies

■ Scam risks• Accomplice / illicit behaviour scams • Bogus products and services• Business targeted scams• Gambling scams• Identity Frauds

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Cybercrime and Financial ServicesContinued...

• Investment frauds• Money making scams• Technological scams

■ Cyber risks• Cyber attacks• Cyber extortion

Countermeasures ■ Behavioural controls

• Social Media Safety • Email Compliance • Hardware and Software Safety • Password security • USB Security • Remote Working Compliance • Escalation • Safe Surfing

Behavioural economics • Heuristic learning • Biases Mini case study: Your comedy character name

■ IT Countermeasures• Physical perimeter• Data perimeter• IT perimeter

Mitigation and prevention ■ Data journey

• Risk analysis• Risk touch points• Mitigations• Management information• Escalation

■ The role of identity confirmation• DPA process• Weaknesses• The role of due diligence

■ The role of training• Identify• Classify• Escalate

■ Reporting requirements• FCA• ICO• New European Requirements

Learning and future mitigation ■ Root cause analysis ■ Governance structures

• Committees• 3 lines of defence• Monitoring and assurance

Case study and team exercise

■ The has been a significant data breach at your firm, discus with the team what steps you would take to determine:• What has occurred?• What offences have been committed?• What controls have been breached?• What further investigations should be

considered?

To whom you may need to report the breach? Summary ■ Learning summary ■ Further learning opportunities ■ Summary of case studies

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Course Content

Fraud & Financial Services

Course Overview

With the introduction of the Criminal Finances Bill in 2017, firms will need to ensure that they have in place appropriate procedures to ensure they do not facilitate tax evasion. Tax evasion is a fraudulent act.

Depending on the nature of their fraud risks, most regulated firms will already have provision in place for the prevention and investigation of fraud. However, the methods used by fraudsters are constantly evolving. This has led to the UK legal framework placing an increasing burden upon firms to prevent certain common financial crimes.

This course provides a refresher on the provisions of both the Theft Act 1968 and the Fraud Act 2006 before linking these events with the wider risks faced by firms including, reporting requirements, data security and identity theft and the corporate offences firms may commit when targeted by fraudsters.

It also looks at financial crime investigation as well as the pitfalls faced by firms when they attempt to prevent, detect, investigate and report fraud, theft and tax evasion.

Why fraudsters target financial services firms ■ The fraud “marketplace” ■ External fraud

• Sources of external fraud• Subversion• Physical acts• Collusion

■ Internal fraud• Sources of internal fraud• Internal corruption• External corruption• Facilitation and graft• Collusion

■ The fraud triangle• Opportunity• Pressure• Rationalisation

■ Fraud methodologies• The Levy report• Private sector fraud• Public sector fraud• Recent developments in fraud ty-

pologies ■ Distance selling risk ■ Identity manipulation and theft ■ Social media manipulation ■ Links to organised crime and terror-

ism

The legal framework ■ Theft Act 1968

• Section 1, 8, 9 and 10 offences• Secondary offences

■ Fraud Act 2006• Section 2,3 and 4 offences• Secondary offences

■ Proceeds of Crime Act 2002

• Section 327, 328 and 329 offences• Secondary offences

■ Terrorism Act 2000• Section 15, 16, 17 and 18 offences• Secondary offences

■ The coming of corporate offences• Data Protection Act 1998• Bribery Act 2010• Criminal Finances Bill 2017• General Date Protection Regulation

Case study and team exercise ■ The training group will be presented

with a series of events and asked to analyse them to determine:• What types of methodologies may

have been deployed against the victims of the events?

• What offences may have occurred?

Detection and prevention ■ Product journey

• Risk analysis• Risk touch points• Mitigations• Management information• Escalation

■ The role of identity confirmation• DPA process• Weaknesses• The role of due diligence

■ The role of training• Identify• Classify• Escalate

■ Layered security ■ Victim typologies ■ Perpetrator typologies ■ Profiling ■ Transaction monitoring

In-House or via Live Webinar

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Fraud & Financial ServicesContinued...

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■ Automation ■ Management information ■ Communication

Investigation and reporting ■ Information gathering ■ Identifying suspects ■ Vulnerable persons’ risk ■ Record keeping ■ The role of law enforcement ■ PEACE model of interviewing

• The role and use of the caution• The role and use of recording• The role and use of notetaking

■ Knowledge and Suspicion• Police and Criminal Evidence Act • R v Da Silva• Objective test

■ File preparation ■ Reporting ■ Criminal property ■ Preserving evidence

Learning and future mitigation ■ Root cause analysis

• The 5 whys?• FME analysis• Ishikawa (fishbone) analysis• Operational risk model of firm

goverance ■ Governance structures

• Committees• 3 lines of defence• Monitoring and assurance

Case study and team exercise ■ In a two part exercise the group

will be asked to consider:• In the previous exercise,

what controls may have been breached or bypassed.

■ The group will be issued with details from an investigation file. They will be asked to consider they will be asked to consider:• What has occurred?• What offences have been com-

mitted?• What controls have been

breached?• What further investigations

should be considered?• What initial conclusions can be

drawn as to the root cause of the events.

Summary ■ Learning summary ■ Further learning opportunities ■ Summary of case studie


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Course Content

The Roles and Responsibilities of the Money Laundering Reporting Officer (MLRO)


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Course Overview

A

Background As far as AML is concerned, the buck stops with the MLRO. This is a key position within any financial services firm. When it comes to the identification, detection, escalation, reporting, managing and training of staff on Anti Money Laundering procedures it is the personal responsibility of the MLRO to ensure this all happens as effectively and efficiently as possible. In most jurisdictions it is a mandatory role. The MLRO should have a degree of seniority and authority within the business to drive policy decisions and actions. He/she should have undergone sufficient level of training and hold suitable qualifications and experience. Arrangements should be in place for when the MLRO is absent.

This one day workshop is designed to explain fully the roles and responsibilities of an MLRO. The workshop will be highly interactive and discussion, debate plus the swapping of “war stories” will be actively encouraged.

Course Length Case Study In addition to numerous case studies and examples, there will be a a course long case study, involving investigations and escalations to illustrate the learning points fully.

Who Should Attend: MLRO’s and all staff working within a compliance function especially those charged with AML escalations/investigations. Members of the internal audit function. Senior managers and top management would also derive considerable benefit from attending as they are the ultimate risk owners.

The Role of the MLRO: ■ CDD and ongoing monitoring ■ Reporting processes ■ Keeping records ■ Internal controls ■ AML/CTF risk assessment ■ Training of staff ■ Communication of AML/CTF policy and is-

sues within the business

Case Study/Example The Initial Risk Assessment and Identifying and Evaluating Key Risks ■ Country risk Assessment ■ Institution’s risk assessment ■ Adopting the Risk Based Approach ■ How the MLRO, Compliance Officer, Chief

Risk Officer, Internal Audit and the Board should co-ordinate

■ What makes an effective Compliance Of-ficer?

■ Accountability of the Compliance Officer ■ Interdependencies with other control func-

tions ■ Primary, secondary and on-demand compli-

ance ■ The Compliance Officer’s Activities – and the

support required

Case Study/Example

Internal Systems & Policies Including Implementing an Effective Compliance Framework and a Monitoring Programme ■ Analysing legal and regulatory rules ■ Identifying risks ■ Creating an internal AML/CTF policy ■ Designing control and procedures ■ Generating management information ■ Creating an effective compliance culture ■ Monitoring

Case Study/Example

Compliance and Corporate Governance ■ How does the MLRO contribute to Corporate

Governance and help manage risk ■ Reporting to the Board and Board oversight ■ Creating an effective reporting/escalation pro



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Advanced Negotiation Issues in M&AContinued...

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■ cess ■ Working with all levels of management to

ensure training provided is suitable for the business on a risk based basis

■ Dealing with Regulators ■ Dealing with the NCA ■ Submitting regular (minimum annual)

MLRO reports to the Board

Case Study/Example

Keeping up with “The Rules” and the ever changing risks Surrounding Compliance and Financial Crime Prevention ■ Issues in Compliance ■ Issues in Anti-Money Laundering (AML)

and Combating Terrorist Financing (CTF) ■ Issues in Fraud ■ Issues in Identity Theft ■ Issues in Phishing

Case Study/Example

Managing the Risk of Money Laundering ■ Offshore Issues, PEPs and EPs ■ Know Your Client (KYC) and Identification

& Verification (ID&V) ■ Annual reviews ■ High risk clients ■ Monitoring systems ■ Testing procedures

Case Study/Example

Evaluation of Internal Reports ■ Disclosure & Escalation ■ Whistleblowing process ■ Requesting consent ■ Reminding staff about tipping off ■ Escalating to the NCA ■ Obtaining further information ■ Identifying the reasons for suspicion ■ Documenting decisions not to report ex-

ternally ■ Submitting/Escalating SAR’s ■ Policing the process ■ Reporting past practices which recent re-

ports indicate could now me money laun-dering

■ Policing the notice period following an SAR ■ Policing moratorium periods imposed by

the NCA Case Study/Example Other Regulatory Risks ■ Information Security and Data Protection ■ Market Abuse and Insider Dealing ■ Bribery and Corruption ■ Sanctions ■ …and other types and Risks in on-shore

and off-shore Banking

The Roles and Responsibilities of the Money Laundering Reporting Officer (MLRO)

Case Study/Example

Accounting for People Risks in Risk Management ■ Understanding the importance of human

error in procedures-driven environments ■ Common human factor problems

• Steep authority gradients • Reliance vacuums• Dominant individuals

■ Identifying and addressing human factor issues

■ Developing an effective compliance culture

Case Study/Example

Potential Criminal Abuse of Private Banking Services, Trusts and Corporate Services companies ■ Offshore companies and corporate services

analysed ■ Offshore trusts and trustee services ana-

lysed ■ The criticality of fiduciary duty ■ Understanding commercial rationale ■ AML trust and company vulnerabilities ■ Examples of abuse Course

Conclusion – Open Forum and Wrap Up



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AML InvestigationsIn-House or via Live Webinar

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Bank analysts and anti-money laundering (AML) investigators reviewing customer transactions have an important, but often overwhelming, job. Banking professionals tasked with alert resolution, performing periodic reviews on high-risk accounts, and conducting investigations during a look-back transaction analysis consider myriad variables. Increasing budget constraints, deadlines, and volumes of information make it challenging for analysts to address all factors for each investigation. But failure to consider key factors could result in incomplete analyses, regulatory criticism, or other enforcement actions. In the current regulatory landscape, financial institutions are facing a new wave of regulatory scrutiny with no signs of slowing down; in fact, numerous recent government inquiries (especially OFAC) have uncovered anti-money laundering (AML) and sanctions violations at several financial institutions and have resulted in billions of dollars in fines and look-backs for breaches in AML and sanctions programs. All financial institutions can be required to perform extensive reviews of transactions and communicate any suspicious activities to their regulators with accuracy and speed. This course considers the challenge of AML investigations and how to meet them. It is based around two large case studies which will enhance the learning experience. Who Should AttendRisk Managers, Internal Auditors, Compliance Officers, External Auditors, Consultants and suppliers and all financial personnel involved with the risk and compliance function. Knowledge Pre-RequisitesSome knowledge of AML processes and investigations would be helpful.

Session 1: Introduction ■ AML Basics the role of the investigation team ■ Investigations structures ■ Investigation practices ■ STR’s and the escalation process ■ Sanctions ■ Tax evasion ■ Bribery & Corruption

Other financial crimes Session 2: Typical Requirements of the AML Investigation Function ■ Conducting historical transaction reviews in

response to regulatory inquiries ■ Supplementing Know Your Customer (KYC)

due diligence ■ Performing data and trend analysis ■ Data mapping around transactions and ac-

count activities ■ Recovering and extracting forensic data ■ Conducting substantiation checks of investi-

gation procedures and SAR procedures ■ Implementing post-regulatory action re-

quirements Session 3: PIOUS – Streamlining the

Investigation Process ■ What patterns, if any, do you notice in the

transaction activity? (PATTERNS) ■ What is the ultimate source of the funds? (IN) ■ What is the ultimate destination of the

funds?(OUT) ■ Are there any unusual transactions? (UNUSU-

AL) ■ Does the activity rise to the level of suspi-

cious? (SUSPICIOUS) ■ Putting this together in practice ■

Session 4: Two major case studies to illustrate the learning points. Session 5: Course Wrap Up and Open Forum

END



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Course Content

Financial Crime Compliance Including Counter Terrorism


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Course Overview

Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become the key strategic imperatives for all board members.

The reputational damage and not to mention the fines imposed for non-compliance are huge concerns. It is fair to say that banks are being micro-managed by regulators in this area and are being set exceptionally high standards for compliance.

Financial institutions are required to focus increasingly on Financial Crime Prevention measures and must have robust systems in place to combat them. This includes detailed policies, clear lines of defence, robust CDD processes, a risk based approach, clear accountabilities and above all effective staff training and awareness throughout the organisation.

None of this is difficult but it is costly, time consuming and involves putting in place procedures and systems to deter, detect and protect the institution from being used by criminals.

This course is divided into two sections:Day One covers the key Financial Crime Compliance (FCC) issues andDay Two adopts a practical approach to assist all staff and senior staff to comply with their obligations.

The course has several case studies to bring the training to life.

Target Audience ■ All staff with client facing responsibilities especially those where financial crime is a real and

active risk. ■ Risk and compliance professionals, MLROs and members of the internal audit function. ■ Senior managers and top management would also derive considerable benefit from attend-

ing.

MethodologyThe course is in workshop style with participation from delegates actively encouraged.

Introduction: ■ What is Financial Crime ■ Predicate Crimes ■ What are financial institutions required to

put in place – overview ■ What is CDD, KYC, IDV. ■ Who is responsible for FC Compliance? ■ Best Practice/Poor practice

Who sets the rules and who publishes best practice guidelines? ■ FCA ■ UN ■ EEC ■ USA - OFAC

■ BIS – Basel ■ UK Treasury ■ Local Jurisdictions ■ Best Practice Guidelines

• FATF• Wolfsberg Group• Tranparency International• JMLSG• Egmont Group

What must Institutions have in place ■ The regulatory landscape ■ Rules and Instructions ■ Traditional three lines of defence model ■ Escalation process ■ Consent and Tipping Off

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Financial Crime Compliance Including Counter TerrorismContinued...

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■ Risk based due diligence

Sanctions – Brief Overview ■ Who sets them & why are they set ■ Who is impacted ■ What are they ■ OFAC ■ How should an institution screen for them

Risk Based Approach ■ What does this mean ■ How should it work ■ What are the key differences ■ Enhanced Due diligence – what does this

mean

Customer due diligence ■ KYC – getting to know the customer ■ IDV – checking what they say ■ Ultimate Beneficial Ownership ■ PEP’s ■ Source of Wealth ■ Review process ■ Remediation process

Politically Exposed Persons ■ Definition – formal ■ Definition in practice ■ Why are they a special case ■ Mandatory high risk ■ UBO issues ■ Source of Wealth issues ■ Annual Review issues ■ Imminent changes

Specific Identification & Verification Issues ■ Trust nominee and fiduciary accounts ■ Corporate vehicles ■ Introduced business ■ Client accounts opened by professional

intermediaries ■ Non face to face customers ■ Correspondent banking – KYC requirements

and Due Diligence ■ Introduced business

Constructing the FCC Framework ■ Policies ■ Roles and Responsibilities ■ Senior Management and M.I. requirements ■ The MLRO (or equivalent) challenge! ■ Risk Assessments and Procedures ■ Suspicious transactions

Suspicion & Escalation ■ What must banks have in place ■ An effective escalation process ■ Concern ■ Suspicion ■ Access & Process ■ Communication lines ■ Suspicious Activity Reports / Suspicious

Transaction Report ■ The importance of a direct link ■ Whistle blowing

Practical Issues

Method of Money Laundering ■ Electronic Funds Transfer ■ Correspondent Banking ■ Payable Through Accounts ■ Downstream Correspondent Clearer ■ Concentration Accounts ■ Private Banking ■ Structuring ■ Bank complicity ■ Credit Cards ■ Money Remitters & Money Exchange Houses ■ Insurance Companies ■ Securities Broker-Dealers ■ Casinos & Gambling businesses ■ Dealers in High-Value items (Art, Jewellery,

Precious Metals etc) ■ Travel Agencies ■ Vehicle Sellers ■ Notaries, Accountants, Lawyers, Auditors ■ Real Estate ■ Loan Back Method ■ Import/Export Transactions

ML Risks – New Technologies ■ Internet Banking ■ Internet Casinos ■ Prepaid Cards and E-Cash

ML Risks – Structures to hide BO ■ Shell companies ■ Trusts ■ Bearer Bonds & Securities

Terrorist Financing ■ Differences and Similarities between ML and

TF ■ Detecting TF ■ Informal Value Transfer Systems ■ Charities / Non-Profit Organisation

The Offences of ML/TF ■ Vulnerabilities of financial institutions ■ AML/CFT obligations

ML/TF Typologies and Trends (Methods, Techniques, Schemes and Instruments) ■ Attempting to circumvent client identification

requirements ■ Smurfing, using nominees and/or other prox-

ies ■ Use of a Broker account with little trading ■ Activity of Wash Trading

Developing a Risk Rating Framework/Criteria/ Financial Crime Analysis



Financial Crime Compliance Including Counter TerrorismContinued...

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Know Your Employee Program ■ Screening

AML program ■ Basic elements ■ Staff Training – Who, What, How, When &

Where Open Forum Talking Points: ■ AML Policies and Procedures - What is the

difference and why are they important? ■ Probability of an offence crystallising –

using leading case studies ■ Risk of not reporting - using real case

studies ■ Understanding what ML & TF is - dis-

pelling the myths! ■ Government and other Sanction risk in

practice ■ Understanding the difference between

KYC - ID&V - CDD ■ Profiling customers - what does it mean? ■ Building and using trigger events ■ What do you do if you are suspicious ■ Recognising and handling suspicious

transaction reports ■ Human factors in money laundering risk

management ■ Abuse of structures and financial services

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Course Content

Cybercrime: An Overview for Non-FinTech Managers


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Course Overview

Background

Cybercrime prevention in general and data security in particular, are now mainstream priorities for all risk functions in any institution. Recent breaches and leaks have highlighted how catastrophic a breach of either can be. This workshop style course considers the topic from the viewpoint of a non Fintech specialist risk manager responsible for this area of financial crime and who is dealing with Fintech colleagues as part of the process. The course examines the type, frequency and methodology of cyber-attacks and what robust internal measures can be put in place to manage and mitigate them.

Methodology:

Workshop style with participation from delegates actively encouraged. Case studies will be used to supplement the learning process

Introduction: ■ What is Cybercrime? ■ How is it done? ■ Examples ■ What are institutions required to put in

place? – overview ■ Who is responsible for cyber resilience? ■ How do you spot a cyber attack? ■ Basic protections ■ Advanced protections ■ Cost benefit considerations

Case study/Exercise

Who sets the rules? ■ Regulators ■ Legal framework ■ Best practice ■ Poor practice

Case study/Exercise

Mitigants ■ Do you actually understand how data is

stored and accessed? ■ Data security ■ Access controls ■ “God” powers ■ Training the team ■ Policing the system ■ Management information

Case study/Exercise

Operational Risk Factors ■ The policing of emails ■ Compliance rules and enforcement ■ Embedding the appropriate culture ■ Convincing colleagues this is a mainstream

risk

■ Social media ■ Surfing ■ Password and other access security ■ USB’s and other storage devices must be

prohibited ■ Managing people risk

Case study/Exercise

The Clever Criminal ■ Typologies ■ Examples of recent breaches ■ Organised cybercrime ■ Scams ■ Examples of recent scams ■ Identity theft ■ Email fraud ■ Denial of service attacks ■ ”Ransomware” ■ Protecting against all of the above

Case study/Exercise

Learning Lessons ■ Recording “near misses” ■ Root cause analysis – constructive, not a

witch –hunt ■ The three plus two lines of defence model ■ The role of compliance ■ The role of internal auditors

Case study/Exercise

Course Conclusion ■ Summary ■ Open forum

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financial crime compliance courses - redcliffe training · 2019-11-26 · pitfalls in financial...

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