Anti-money laundering strategy and fight against terrorism
What is money laundering ?
Money laundering is taking revenue from criminal activities and masking their illegal source with the aim of using these funds to engage in legal or illegal activities. In a simple manner, money laundering consists in making «dirty money» seem «clean».
The process can be broken into 3 phases corresponding to the techniques of money laundering:
- Placement: it is the input of «dirty money» into the financial sector.
- Dissimulation: it is the succession of transactions in order to erase all links between the funds and their origin.
- Integration: it is the justification of the lawful origin of the funds.
The financing of terrorism is the act of raising or providing funds that could be used for terrorist activities.
Anti-money laundering / Anti-terrorist financing program (LAB/LFT): Elements of a LAB/LFT Program
Commonly named «the four pillars», the basic elements constituting a LAB/LFT program are:
- A system of policies, procedures and internal controls (first line of defense)
- A designated compliance function with a compliance officer
- A continuous training program for employees
- An independent audit function to verify the general efficiency of the LAB program (third line of defense)
COMPANY: YOU HAVE A DUTY OF VIGILANCE
The risk based approach is at the heart of the system of Anti money laundering and the fight against financing of terrorism. It involves the implementation of a system of evaluation and classification of risk in each subject company.
This classification will enable the formulation of surveillance measures with regards to the characteristics of customers and their operations.
The implementation of a LAB/LFT system adapted to your specific risks thus permits you ensure your obligation of vigilance. It relies on the following actions:
- Being informed of new national and international legislations and put in place new corresponding vigilance obligations as soon as possible.
- Use tools for the detection of atypical behaviors.
- Educate and train your work teams.
- Make sure you know your business relations: KYC (know Your Customers).
A solid vigilance program with regard to customers is one of the best ways of preventing money laundering and other financial crimes.
This concept designs the all the procedures to be implemented to ensure deep customer knowledge:
- Collection of identification documents of physical and moral persons in order to be sure of their identity?
- Questioning of official data base: list of terrorists, politically exposed persons, countries concerned by international sanctions, etc.
The information thus collected permits the apprehension of risk vis-à-vis your new business partners and the taking of corresponding decisions (become partners, deny partnership, declaration at tracfin, etc).
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