barrister igbodekwe emmanuel 11- 12 th september, 2013 special control unit against money laundering...
TRANSCRIPT
Barrister Igbodekwe Emmanuel
11- 12TH September, 2013
Special Control Unit Against Money Laundering (SCUML)
Regulating The Accountants for AML/CFT Challenges and Way
Forward
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Topic
Financial Action Task Force (FATF) requirements on accountants
Highlight of the FATF recommendations relevant to accountants
Way Forward in regulating accountants
The Financial Action Task Force (FATF) : an inter-governmental body created in 1989 by ‘G7’ sets standards, develops and promotes
policies to combat money laundering and terrorist financing
published 40+9 Recommendations to achieve its purpose
Now Revised to 40 Recommendations3
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Designated Non-Financial Businessesand Professions (DNFBPs)
DNFBPs as defined by Financial Action Task Force (FATF) are:
Lawyers
Accountants
Trust and Company Service Providers (TCSPs)
Real Estate Agents
Dealers in Precious Metals/ Stones
Casinos
You Play an Important Role
Designated Non-Financial Businesses and Professions (DNFBP)
Trust and Company Services
Providers
Lawyers
Accountants
Casino
Estate Agents
Banks
Securities House Insurance
Firms
Dealers in Precious
Stones and Metals
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FATF Requirements on Accountants
New Technology
(Rec. 15)
Accountants – operating individually
or in a firm
CDD (Rec. 10, 22)Complex
Transactions (Rec 20, 21)
Record Keeping (Rec. 11)
STRs (Rec. 20 & 21)
Internal Control (Rec. 18)
PEPs (Rec. 12)
Special Attention (Rec. 21)
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FATF Requirements on the Accounting Profession
The Accounting Profession
Sanctions(Rec. 35)
Guidelines(Rec. 34)
SRB(Rec. 24)
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FATF Requirements on Accountants
Customer Due Diligence (Rec. 10, 22, 23)
Record Keeping (Rec. 11)
Suspicious Transaction Reporting (STR) (Rec. 20)
Risk-based Approach Guidance for Accountants (REC. 34)
Requirements to be specified in law:
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When to Conduct CDD?
When accountants prepare for or carry out transactions in relation to: Buying and selling of real estates;
Managing of client money, securities or other assets;
Management of bank, savings or securities accounts;
Organisation of contributions for the creation, operation or management of companies;
Creation, operation or management of legal persons or arrangements, and buying and selling of business entities.
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When to Conduct CDD?
When accountants act as Trust and Company Service Providers and
Acting as a formation agent of legal person;
Acting as a director or secretary of a company;
Providing a registered office, etc for a company;
Acting as a trustee of an express trust;
Acting as a nominee shareholder for another person.
They have to comply with Rec. 5, 6, 8-11, 21.
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FATF Requirements on Accountants
Other selected requirements:
Internal Controls (Rec. 18)
Self Regulatory Organisation (SRB)
(Rec. 28 & 35)
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Internal Controls
To establish / maintain internal policies / procedures to prevent ML / TF.
Policies / procedures to cover CDD, record keeping and STR obligations.
To communicate these to employees.
To develop appropriate compliance management (e.g. AML/CFT Compliance Officer at management level).
INTERNAL CONTROLS
On-going staff training. Independent audit function to test
compliance with the policies and procedures.
To put in place screening procedures to ensure high standards in hiring employees.
The type and extent of measures to be taken should commensurate with:
the level of ML / TF risk; and the size of the business.
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SRO – Responsibilities & Sanctions
Government authority or SRB to monitor and ensure compliance with AML / CFT requirements.
Power to sanction in case of non-compliance.
Effective, proportionate and dissuasive criminal, civil or administrative sanctions be available.
SRO - SANCTIONS
Range of sanctions available should be broad and proportionate to severity of non-compliance.
Sanctions should be available to legal persons, their directors and senior management.
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SRO - RESOURCES
Adequate structuring, funding, staff with sufficient technical and other resources to fully and effectively perform their functions.
Sufficient operational independence and autonomy to ensure freedom from interference.
Staff be of high professional standard & integrity and adequately trained for AML / CFT.
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Government authority or SRO to establish guidelines to include the following:
ML / FT techniques and methods; and any additional measures that accounting
firms/accountants could take to ensure their AML / CFT measures are effective.
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Establishment of Central Co-ordinating Committee (CCC), NRA - CCC
To steer & co-ordinate the strategic development of AML/CFT regime in line with internationally recognised standards.
Action by Political Authority
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Establishment of
Legal Framework
Institutional Framework
Designation of Institutions with AML / CFT matters and with specific responsibilities on financial sectors (FIUs).
Law Enforcement agencies
DNFBPs and Non-profit Organisations.
Action by Political Authority
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Conflict of Accounting Concepts
Transparent Disclosure
Wholesome Importation of Principles and Procedures
Independence of Accountants
Legitimacy of Figure Manipulation
Background of Some Accounting personnel
Integrity and Ethical principles
knowledge of AML/CFT
AML/CFT Displacement
Disregard for good governance and Accountability
Complexity of Practice
Whistle blower
Customer Confidentiality
The culture of get rich syndrome
New technologies
Challenges Con’d
General
Political Factors
Economic Factors
Technological factors
Environmental Factor
Legislative Factors
Challenges Con’d
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Phase I : Financial Sectors
Phase II: DNFBPs
Political Will
Management Will
Way Forward
Legislation on CDD & Record Keeping
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Consultation on Legislative Proposals and Amendments.
Continued reliance on unregulated Third Parties by Financial Institutions. (Financial Inclusion).
AML/CFT included as part of Financial Reporting Standards Requirements.
Way Forward Contd…
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Step up outreaching activities to raise awareness on AML / CFT and work closely with professional bodies.
Seminars, Workshops,
one-on-one Inter-Face with Stakeholders
Sector Specific Guidelines.
Interactive System Mechanism.
Way Forward Contd..
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Way Forward Contd..
Timeline
Compliance costs
Regulatory Authority
Bye-Laws (Regulations)
Consultation Issues
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Internal
Control
Systems
Staff Traini
ng
Audit Functi
on
Policies and
ProceduresComplia
nce Officer
Compliance Costs (1)