Financial Crime Risk Services

Protect Your Organization Using Financial Crime Compliance Consultants

According to the United Nations Office on Drugs and Crime, the estimated amount of money laundered globally in one year is 2 - 5% of global GDP, or US$800 billion - US$2 trillion at current foreign exchange rates. Financial Crime has a devastating impact on communities across the world allowing criminals, and their illegal activities, to profit from these crimes. Financial Crime encompasses a spectrum of illicit activities, including Money Laundering, Fraud, Economic Sanctions Compliance, Bribery &Corruption, and Cybercrime. Set out below are generic definitions of these financial crimes.

1. Money Laundering: involves disguising the origins of illegally obtained proceeds, assets or property, so that they appear to be legitimate.

2. Terrorist Financing: the methods used by terrorist organizations to finance activities that pose a threat to domestic and international security. Funds and assets, which can be from legitimate and illegitimate sources, provide terrorist organizations with the capacity to carry out terrorist activities.

3. Fraud: Deceptive practices to gain financial advantage.

4. Bribery & Corruption: Unethical conduct, often involving bribes and improper influence.

5. Cybercrime: Digital attacks targeting sensitive financial information.

Over the past few decades, there has been a significant increase in government enforcement actions targeting companies for Financial Crime Compliance violations. From anti-money laundering (AML) breaches to violations of Sanctions Compliance regulations, governments and regulatory agencies around the world have increased their scrutiny of businesses, imposing hefty fines and sanctions for non-compliance. This trend reflects a growing recognition of the importance of Financial Crime Compliance and ensuring the integrity of the global financial system.

Financial crime risks are global in nature, affect a large number of industries, can infiltrate businesses through various means, and can pose severe risks to businesses. The consequences of falling victim to financial crime can lead to significant penalties. The November 2023 enforcement action taken by U.S. government agencies against Crypto currency firm Binance (US$4.5 billion fine) for crypto Financial Crime Compliance violations is just one of many examples. The ever-evolving nature of Financial Crime Compliance demands appropriate risk management frameworks, policies, systems and controls to safeguard businesses so as to maintain compliance with regulatory requirements.

Key Components of a Financial Crime Compliance Program

1. Risk Assessment: A comprehensive risk assessment should be created to identify and prioritize the specific financial crime risks facing companies. This assessment should encompass a wide range of risks, including money laundering, terrorist financing, bribery and corruption, and sanctions compliance violations, taking into account factors such as the nature of the company's business, customer base, geographic locations, and products and services offered.

2. Policies and Procedures: Comprehensive policies and procedures should be created tailored to the identified risks and applicable financial crime compliance regulatory requirements. These policies should cover areas such as customer due diligence (CDD), know your customer (KYC) procedures, transaction monitoring, suspicious activity reporting (SAR), sanctions screening, and employee training, amongst other areas.

3. Customer Due Diligence (CDD): Experienced financial crime compliance consultants are able to develop robust and efficient CDD processes to verify the identity of customers, assess their risk profile, and monitor their transactions for suspicious activities. This may involve collecting and verifying customer identification documents, conducting enhanced due diligence (EDD) on high-risk customers, and periodically reviewing customer information.

4. Transaction Monitoring: Deploy sophisticated transaction monitoring systems to detect and investigate potentially suspicious activities. These systems should be capable of analyzing large volumes of transaction data, identifying patterns and anomalies indicative of financial crime, and generating alerts for further investigation for example by an AML Consultant or Money Laundering Reporting Officer.

5. Suspicious Activity Reporting (SAR): Establish procedures for the timely and accurate filing of SARs with the relevant authorities whenever suspicious activities are detected. This requires robust processes for investigating and documenting suspicious transactions, as well as clear communication channels with regulatory authorities.

6. Sanctions Screening: Implement sanctions screening systems to screen customers, transactions, and counterparties against relevant sanctions compliance lists and watch lists. This helps ensure compliance with international sanctions regimes and prevents inadvertent involvement in prohibited transactions.

7. Employee Training and Awareness: Provide regular training and awareness programs to employees at all levels of the organization to enhance their understanding of financial crime risks, regulatory requirements, and the company's financial crime compliance policies and procedures. Financial crime compliance consultants can assist in this training. Staff members should be empowered to recognize and report suspicious activities effectively.

8. Independent Testing and Review: Conduct regular independent reviews and audits of the financial crime compliance program to assess its effectiveness, identify weaknesses or gaps, and implement corrective actions. This may involve internal audits, independent third-party reviews, or regulatory examinations which financial crime compliance consultants can assist with.

9. Governance and Oversight: Establish robust governance structures and oversight mechanisms to ensure accountability and responsibility for financial crime compliance throughout the organization. This may include the appointment of a dedicated chief compliance officer, the establishment of a compliance committee, and regular reporting to senior management and the board of directors.

RegulatoryRisks.com

Designing a successful financial crime compliance program is essential for companies operating in regulated industries such as financial services. By implementing a comprehensive financial crime compliance program that encompasses risk assessment, policies and procedures, customer due diligence, transaction monitoring, suspicious activity reporting, sanctions screening, employee training, independent testing, and governance and oversight, companies can demonstrate their commitment to financial crime compliance and build trust with regulators, customers, and other stakeholders. In an environment of increasing regulatory scrutiny and evolving financial crime threats, a proactive and robust financial crime compliance program is not just a regulatory requirement but a strategic imperative for companies operating in regulated industries.

Regulatory Risks is a specialist regulatory compliance, ESG and risk management marketplace enabling your business to access a vetted global pool of chief compliance officers, financial crime compliance consultants, and AML consultants on demand. Ensuring your company has the right talent when you need it most is critical. Hire a Money Laundering Reporting Officer for your business today. The Regulatory Risks platform streamlines the hiring process, saving you time and effort. Find, and onboard a financial crime compliance consultant, Money Laundering Reporting Officer, chief compliance officer or AML consultant seamlessly.

Strengthen Financial Crime Compliance at your organization. Hire a Money Laundering Reporting Officer, BSA Officer or AML Consultant