US Industry & Business Update

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Marvin Black
7 years ago
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1 Global Banking Symposium 2006 US Industry & Business Update Wayne L. Bennett June 8, 2006

2 Global Banking Symposium 2006 Anti Money Laundering Update

3 USA Patriot Act Section 312 Final Rule Requirements US Financial Institutions must develop and implement minimum due diligence programs for: Foreign correspondent accounts Foreign private banking accounts Effective dates: July 5, 2006 for new accounts established for foreign banks, foreign branches of US banks, mutual funds, currency dealers or exchangers, money transmitters or future commission merchants October 2, 2006 for accounts opened before July 5,

4 USA Patriot Act Section 312 Minimum due diligence requirements: Identify all foreign correspondent accounts Perform a risk assessment of each account to determine if standard due diligence (low risk) or enhanced due diligence (high risk) is required Monitor nature and volume of account activity and ensure such activity is consistent with what is expected Identify suspicious transactions in the account 4

5 USA Patriot Act Section 312 Due Diligence Program Five Risk Factors The nature of the foreign financial institution s business and the markets it serves. The type purpose and anticipated activity of such correspondent account. The nature and duration of the covered financial institution s relationship with the foreign financial institution (and any of its affiliates). 5

6 USA Patriot Act Section 312 Due Diligence Program Five Risk Factors The Anti Money Laundering and supervisory regime of the jurisdiction that issued the charter or license to the foreign financial institution, and to the extent that information regarding such jurisdiction is reasonably available, of the jurisdiction in which any company that is an owner of the foreign financial institution is incorporated or chartered Information known or reasonably available to the covered financial institution about the foreign financial institution s anti-money laundering record. 6

7 JPMorgan Chase AML Program AML Governance AML Oversight Committee ("AMLOC") The purpose of AMLOC is to assist in the development and implementation of the AML program. AMLOC shall work with AML Corporate Compliance, and shall consist of Compliance officers and other key representatives with AML responsibilities and interests across the Firm. AMLOC shall be chaired by the Global Director of AML Compliance. Global Director of AML Compliance Reports to the Global Head of Compliance and is responsible for developing, implementing and overseeing the Firm s world-wide AML Program, including the USA PATRIOT Act compliance. AML Corporate Compliance. AML Corporate Compliance, reporting to the Global Director of AML Compliance, is responsible for assisting in developing, implementing, and overseeing this AML Program. 7

8 JPMorgan Chase AML Program AML Policy Approved by JPMC s Board of Directors. Required by the Bank Secrecy Act and USA PATRIOT Act. Core Policy created to ensure JPMC s compliance with important requirements governing client risk, namely laws and regulations governing anti-money laundering, anti-terrorist financing, and related sanctions. Components of JPMC s Anti-Money Laundering Compliance Program include: Policies, procedures and a system of internal controls to assure on-going BSA/AML and OFAC compliance; Procedures for independent testing; Designation of individuals responsible for coordinating and monitoring day-today compliance with the AML program; Training; and Record keeping and reporting cash transactions. 8

9 JPMorgan Chase AML Program AML Policy - Key Components Customer Identification Program Know Your Customer Customer Due Diligence Customer Risk Assessment Ongoing Due Diligence Suspicious Activity Reporting Training Recordkeeping Sanctions 9

10 AML Risk-Based Assessment of Clients 10

11 JPMorgan Chase AML Program Risk Based Standards Global KYC Program Standards R I S K Standard Due Diligence: Enhanced Due Diligence: Specialized Due Diligence: Relationship Reviews: Low-risk Clients CIP & general questions Minimum Documents High-risk Clients Annual renewal Additional questions Closer scrutiny /Screening Cash Intensive Bus Casinos FEMC s Hedge Funds MSB s & MT s Charities PEP s Prof Svc Providers 3 rd Party Pmt Proc Money Transmitters Foreign Correspondent banks Etc. 11

Bank Secrecy Act, Anti-Money Laundering, and Office of Foreign Assets Control

Bank Secrecy Act, Anti-Money Laundering, and Office of Foreign Assets Control Overview The Bank Secrecy Act (BSA) was created in 1970 to assist in criminal, tax, and regulatory investigations. The Financial