Berdie Dixon Daley Director FINANCIAL INTELLIGENCE UNIT (FIU) FINANCIAL INVESTIGATIONS DIVISION

Transcription

1 Berdie Dixon Daley Director FINANCIAL INTELLIGENCE UNIT (FIU) FINANCIAL INVESTIGATIONS DIVISION

2 MANDATE OF THE FID Receipt, analysis and dissemination of information of suspicious activities. The investigation of money laundering, terrorist financing and other financial crimes Recovery of criminal proceeds The management and maintenance of seized assets Collaboration with overseas bodies in fighting transnational crimes

3 OVERVIEW SUSPICIOUS TRANSACTION REPORTS Recent Legislative Amendments Electronic Online Reporting Risk Assessment Use of Data for Tactical & Strategic Analytical Purposes

4 OVERVIEW THE CONSENT REGIME Statutory Requirements Authorized Disclosures (Sec 100.4) Procedures for Seeking Consent

5 OVERVIEW TYPOLOGIES Current ML Trends Emerging Threats

6 Suspicious Transaction Reports Recent Legislative Amendments

7 Suspicious Transaction Reports Recent Legislative Amendments POCA Section 94 Provides a clear distinction between suspicious transactions and unusual transactions Now to be treated differently by regulated sector

8 Suspicious Transaction Reports Suspicious transactions reports are required disclosures to a NO or the DA where there is knowledge or belief that a person has engaged in a transaction that could constitute or be related to ML. Pay special attention to transactions involving persons resident or domiciled in any territory specified in a gazetted list of applicable territories (POCA sec.94).

9 Suspicious Transaction Reports UNUSUAL TRANSACTIONS For unusual, complex or large business transactions, or unusual patterns of transactions whether completed or not, the FI is to make and maintain a record of these transactions for seven years. These transactions are not reportable but should be available by request to the Designated, Supervisory or Competent Authority

10 Suspicious Transaction Reports ELECTRONIC ONLINE REPORTING Now imminent due to the acquisition of the goaml software Changes in forms (1 & 2) to reflect the particularities of different types of institutions as allowed by POCA (MLP) Reg.17. Enhanced monitoring by FI and may require improved IT infrastructure Will be mandatory, FID to provide necessary support & assistance

11 Suspicious Transaction Reports ELECTRONIC ONLINE REPORTING There will be some compulsory fields on the forms and therefore the reports will be rejected if the following information is not provided: Reporting Financial Institution Information Name & Telephone number for Nominated Officer (or his designate) Unique reference number Full Name of Customer TRN of Customer (Exceptions will be allowed for customers with foreign addresses) Address of Customer Date of Birth of Customer Identification Information Name of Person conducting Transaction (Agent) Transaction Type/ Date/Currency/Amount/ JMD & USD Equivalents Reasons for Suspicion (For STRs)

12 Suspicious Transaction Reports RISK ASSESSMENT Regulatory requirement (New MLP Reg. 7A) Protects your institution Informs level of monitoring for each client Apply to existing & new clients and one off transactions Develop criteria and select tools to quantify AML & CFT risks Result in an improved risk environment

13 Suspicious Transaction Reports Risk Assessment Identify Risk Assess Risk Mitigate Risk Create Risk Profile Manage Risk

14 Suspicious Transaction Reports Risk Assessment Data Management Collection of client data Screening of data Blending of data using IT applications Analysis of data for improved intelligence

15 Suspicious Transaction Reports Risk Assessment Type of Customer/Business Higher Risk Businesses Export/Import Complex Ownership Structure Overseas incorporation Cash Intensive Businesses Currency exchange & other MSB Casinos, betting & other gaming entities Gas stations, wholesales & other cash businesses Higher Risk Individuals High net worth PEP Non residents

16 Suspicious Transaction Reports CUSTOMER RISK Customer Type Demographic Profile High Risk Sectors Business Interests Politically Exposed Structure Transactions Customer Stability Political affiliations, Judiciary, Senior JCF & JDF Officers, Senior Public Officers Beneficial ownership & control Transparency Level of cash transactions Third party payments Background Credit History OVERALL RISK RATING

17 Suspicious Transaction Reports USE OF DATA 1. To conform with local & international requirements to address AML/CFT concerns. 2. To analyze data for identification & initiation of cases for investigation. 3. To provide support to local law enforcement and international partners. 4. To ensure compliance of reporting entities. 5. To develop typologies. 6. To formulate strategic plans. 7. To provide feedback for policy development.

18 The Consent Regime

19 The Consent Regime Statutory Requirements Where a financial institution has knowledge or reasonable grounds to believe that the funds involved in a transaction are criminal property, the financial institution must obtain the appropriate consent of the DA before doing that transaction or otherwise decline to proceed with the transaction. Failing this, the financial institution may be liable for engaging in a prohibited transaction. A prohibited act is defined as a money laundering offence under sections 92 and 93 of POCA.

20 The Consent Regime Statutory Requirements A prohibited transaction should only be done when: The DA gives consent to the transaction, or 7 working days have passed and the NO has not received a response from the DA, or Consent was refused, but 10 days have passed since the receipt of that refusal notice without any subsequent judicial action.

21 The Consent Regime Statutory Requirements To avoid tipping off and unauthorized disclosures the financial institution should not disclose to the customer: During the 7 working days notice period that the transaction is awaiting consent from the DA, During the 10 day moratorium period, that consent was refused by the DA, or That law enforcement is or may be conducting an investigation.

22 The Consent Regime Authorized Disclosures (POCA S.100.4) A disclosure is authorized under Section 100(4) if: It is a disclosure to an authorized officer or nominated officer of information or other matter that causes the person making the disclosure to know or believe, or to have reasonable grounds for knowing or believing that property is criminal property; (POCA Amendment 2013)

23 The Consent Regime Authorized Disclosures (POCA S.100.4) It is made under the following conditions: Firstly, that the disclosure is made before the person does the prohibited act Secondly, if the disclosure is made after doing the prohibited act, the person has a reasonable excuse for failing to make the disclosure before doing the act and the disclosure is made on the person s own initiative and as soon as is reasonably practicable for him to make it.

24 The Consent Regime Procedures for Seeking Consent Submit authorized disclosure to FID (Form III) to apply for appropriate consent Form III now under design, soon to be available For urgent action/situations, a verbal consent or refusal may be provided, after the consent request has been received (faxed), to be followed within 5 days by written confirmation

25 TYPOLOGIES

26 TYPOLOGIES Current & Emerging Threats Advanced Fee Scam (includes lottery, loan, investment) Indicators Multiple remittances in same month Multiple senders to one recipient One sender to multiple recipients Elderly senders Relatively young recipients Large & frequent wire transfers Large cash withdrawals & POS transactions Inadequate SOF information Purpose for which funds are said to be sent not credible Asset acquisition not supported by income Sometimes recipient not real beneficiary, funds passed to 3 rd party

27 TYPOLOGIES Current & Emerging Threats Micro finance loan services (same day loans) Indicators Capital outlay not known or doubtful origin Usually provide cash loans to customers Most repayments by salary deductions integration phase Registered owners fronting for others Sector mushrooming Currently unregulated principals not subject to fit & proper tests Commingling of funds

28 TYPOLOGIES Current & Emerging Threats Indicators Use of Professionals (Lawyers, Accountants, Car Dealers, Real Estate Dealers) Note: DNFBPs will soon be part of the regulated sector Large & frequent cash deposits (mostly USD) Claims that funds belong to clients Clients not identified Clients accounts improperly managed Large wire transfer credits and/or debits Inadequate SOF information/confirmation

29 TYPOLOGIES Current & Emerging Threats Use of Cash Based Businesses (Wholesales, Supermarkets, Gas stations, Hardware Merchants, Clothing Stores, Beauty Shops etc.) Indicators Commingling of business funds with tainted money Deposits in excess of expected income Cheque disbursements to unconnected parties Mismatch of net worth of owners with funds passing through accounts Funds being deposited to personal instead of business accounts Large cash deposits to investment, credit union or building society accounts Multiple accounts & FIs used simultaneously Frequent deposits through ATMs Deposits of foreign currencies in excess of what business is expected to generate

30 TYPOLOGIES Current & Emerging Threats Gaming Rooms Over Utilisation of Credit Facilities (Loans, Credit Cards etc.) Indicators Large cash deposits (mostly USD) Deposits greater than expected or declared income Obscure ownership arrangements Not captured under the Casino Gaming Act Large wire transfer credits and debits Frequent loans that are repaid within months Cheque disbursement for loans but cash repayments Transaction not conforming to rational business decisions Funds available in account no basis for loan Frequent overpayments on credit cards

31 TYPOLOGIES Current & Emerging Threats Indicators Illegal Cambio Operations Frequent FX sales /deposits unrelated to legitimate business activities Existing cash based business (supermarket, wholesale, hardware etc.) Multiple currencies involved in transaction Inadequate SOF information Normally Sole Proprietor Value of transactions exceed projected business income

32 THANK YOU