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risk management

It has become fashionable to talk of "The Three Lines of Defence" in relation to money laundering, terrorist financing, etc. Is it just more more quasi-militaristic buzzwords, so loved by Americans, and a pretence of intellect or is there genuine merit here?

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Financial crime risk management - be it related to money laundering, terrorist financing, fraud or embezzlement purposes, to say nothing of anti-bribery requirements - is expensive. For small businesses, it's cost prohibitive. Compliance is even worse. Is it feasible, permissible, even advisable to share the burden with others?

A property developer in Manchester, England, has been convicted and sentenced after the roof and part of the rear wall of a building collapsed during demolition works. One might think that's kind of the point of demolition but not when it's done in an unsafe manner.

CoNet Section: 

With effect from 4th April, 2018, new rules will apply to Australian financial services (AFS) licensees that hold "derivative retail client money."

Inevitably, it's not that simple. Then again, our detailed analysis shows that compliance should not be expensive or difficult,

This article was first published by Nigel Morris-Cotterill in June 2003
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The financial services industry is getting only part of the risk management and anti-money laundering point. And modern business models in banking and insurance militate against effective know-your- customer procedures says Nigel Morris-Cotterill of The Anti Money Laundering Network.

In May 2017, I addressed the global annual conference of the Institute of Enterprise Risk Managers. During that presentation, aimed at the CEOs of major corporations, I explained that board members are responsible for the whole of the Group, not merely a division or even the company of which they are expressly a director of. In this article, I publish those comments, as scripted.

BIScom Subsection: 

A post on LinkedIn recently * says "In the line of duty as a Compliance, I always said to my friend and subordinate; "Never ever say can not until the regulation really declare can not"."

Is this a safe policy?

Below, free content, is my interview, given in May 2017 at the Thompson Reuters Regulatory Summit in Singapore, published today.

BIScom Subsection: 

When the Department of Justice and others settled criminal proceedings against Western Union there were two special features: one, liability was admitted and two "ensure that its agents around the world will adhere to U.S. Regulatory and [counter-money laundering] standards."

Is this doable while remaining profitable or does the settlement mean inevitable de-risking and closing in some markets?

BIScom Subsection: 

When we found an advertisement for illegal downloads of Sun Tzu and the Art of Litigation, we wrote to everyone that public records showed as connected to the issue or hosting of the domain. We found, again, that Cloudflare was at the heart of the illegal operation and therefore being paid to provide services to criminals who may be generating profits for organised crime or for material support for terrorists. FCROs must consider the business practices and risk management models of their customers because, by definition, banks are receiving, harbouring and distributing the proceeds of criminal conduct received via those companies.

FCRO Subsection: 

There is an absolute bar on members of the US Senate using private e-mail addresses and systems for government-related correspondence. The rules do not ban the use of such systems for purely personal correspondence. In this area, there is no such thing as "private" in relation to government-related correspondence. Therefore, it is clear: Clinton acted in breach of rules and, depending on how it is read, the law. But she thinks it doesn't matter. Can her arguments be a beacon of hope to compliance and financial crime risk officers where there are technical failures in compliance regimes?

FCRO Subsection: 

Carlo V di Florio, Director, Office of Compliance Inspections and Examination at the USA's Securities and Exchange Commission says that compliance and ethics are each an integral part of risk management in all businesses but especially in the financial sector were reputation greatly matters to the individual, to individual businesses to the industry as a whole and, ultimately, to the entire country. He was speaking to the National Society of Compliance Professionals on 17 October 2011.

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