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Money Laundering

It all comes out in the wash

Governments around the world, including in China, are taking an increasingly proactive approach to the prevention of money laundering. Like it or not, that’s the world we’re operating in - and companies involved in financial services, insurance, real estate, accountancy, brokerage, gaming and precious metals have to take these new requirements seriously. The personal and corporate risks are simply too high to ignore.

No business, cash-intensive or not, is immune from becoming the unwitting accomplice of money launderers. These challenges are compounded for global companies with multiple legal and regulatory requirements, languages, systems and business cultures.

As the international community moves toward tighter regulations and more aggressive enforcement, companies operating in global markets face new responsibilities to identify, report and prevent money laundering activities, no matter where in the world they do business.

First things

  • Establish, test and monitor enterprise-wide policies and procedures.
  • Maintain a strong control culture.
  • Designate a Chief Anti-Money Laundering Officer.
  • Identify who you’ll depend on for external counsel in each jurisdiction.
  • Build in continuous improvement to reflect changing legislation.
  • Identify resources for conducting electronic transaction look-backs.
  • Stress-test your capabilities to detect risk.
  • Develop a comprehensive incident management plan.
  • Test your detection framework to make sure it actually works.
  • Organise extensive training programmes to enhance employees’ AML awareness and vigilance.

Essential capabilities

As money launderers have become increasingly sophisticated, so too must the management of this critical threat. Conducting effective forensic investigations and evaluation of compliance frameworks involving electronic data, in particular, requires advanced technology, deep experience and these specialised capabilities:

  • risk assessments at the enterprise and business unit level
  • protocols for responding to regulatory orders
  • drafting and enhancing policies and procedures
  • “know your customer” programme and enhanced due diligence
  • training, compliance assessments, forensic analysis
  • advanced data mining technology
  • chain of custody controls
  • investigations
  • internal investigations
  • credible remedial action plans and implementation support.
No room for error

While all the critical threats covered on this site are significant, the threat of money laundering is uniquely troublesome. Perhaps it’s the association with illegal drugs or terrorism, perhaps it’s the implication of organised crime. Whatever the reason, suspicion of money laundering can destroy personal and corporate reputations faster than almost any other threat. Even the hint of involvement can send your stock price into a tailspin. When a money-laundering crisis begins to emerge, there is no room for error. That means you have to be prepared well in advance. Know exactly who your team will be and how everyone will respond.

Most important of all, recognise the fact that regulations related to money laundering are becoming more and more complex. International businesses need to be aware of laws that can reach over borders and financial systems causing unexpected impacts and publicity.

In today’s zero tolerance corporate climate, taking responsibility to safeguard your organisation, its employees, directors and shareholders from the fallout of possible criminal and civil fines and penalties is essential.

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