Why Should You Attend:
There was a time when a wire transfer may come in with the “By Order” party listed as “My Good Customer.” No longer.
That statement sums up AML/KYC Risk. Essentially there is no such thing as “My Good Customer.” All customers, irrespective of origin, charter, impeccability, bring with them risk. The challenge to the financial institution comes in the form of identifying the customer and the customer’s surroundings. It is insufficient to see a customer, whether an individual or legal entity, as someone or something unto itself. Overlooking a customer’s relationships may lead to serious difficulty as the relationship to the institution develops.
This webinar will explore why gathering the required information for the Customer Identification Program is a good start, but knowing what the customer plans to do with the account and actually does with it is also critical to managing customer risk.
Areas Covered in the Webinar:
– KYC: What the Law Requires
– Customer Identification and On-boarding
– The Customer BSA/AML Risk Assessment
– CDD/EDD/On-going Risk Based Monitoring
– The Customer Activity Profile
– Transaction Monitoring
– If the Customer Really is Laundering/Financing Terrorists
Who Will Benefit:
– BSA/AML Officers
– Compliance Officers
– Chief Compliance Officers
– Sanctions Officers
– AML Analysts
– Risk Officers
– Chief Risk Officers
– Legal Departments
– Risk Managers
– Money Services Businesses
– Other non-bank financial institutions
William Schlameuss has over 20 years’ experience in regulatory compliance, including BSA/AML/OFAC. He has worked with a wide range of US branches of major foreign banking organizations from all continents, both as chief compliance officer and compliance consultant. He has a prior background in IT as manager and implementer of core banking and payment systems, as well as compliance-related systems.
Mr. Schlameuss has extensive experience with State and Federal Banking regulators in examination preparation, assistance and response, including assistance in the remediation of written agreements for clients.
As a project manager Mr. Schlameuss has led BSA/AML audits, BSA/OFAC Model Validations, remediation efforts of BSA audit issues, and BSA/OFAC look-backs for international banks, both self-imposed and directed by regulatory authorities. Model Validations included Prime, FCRM, Patriot Officer, Actimize, and eGIFTS.
He has conducted the Annual 3130 Supervisory Reviews for Broker-Dealers of the US branches of major FBOs. Mr. Schlameuss is also a member of the Association of International Bank Auditors and the International Bank Regulatory Compliance Committee.
Financial Institutions effectively manage their Bank Secrecy Act / Anti-Money Laundering / Office of Foreign Assets Control Risk when they have in place a robust compliance program, one that has (1) a system of internal controls to ensure ongoing compliance, (2) an independent testing program of BSA compliance, (3) a specifically designated person or persons responsible for managing BSA compliance (BSA compliance officer), and (4) training for appropriate personnel. All institutions vary in size, type of products and services offered, customers served, and geographic regions served. At the heart of BSA Compliance lies the institution’s Know Your Customer (KYC) program as developed and enforced in its Customer Identification Program (CIP).
It is axiomatic that some products and services carry a higher risk than others, like USD Dollar Clearing and Trade Finance as opposed to CDs and IRAs, that some geographies have a higher risk than others, like North Korea and Iran as opposed to the United States and Canada. But no matter what products and services and geographies carry a higher risk, no product, no service, no country has ever conducted a money laundering or terrorist financing activity – people do. There is always a person or persons, whether as individuals, companies, governments, charities, behind the activity.
That makes the managing of Know Your Customer Risk a critical component of a robust BSA/AML Compliance Program.
The enactment of the USA Patriot Act in 2001 ended a decade long nebulosity surrounding the development of a rigorous KYC program. The one official attempt to clarify the KYC concept, the 1997 Federal Reserve Notice of Proposed Rule Making on “Know Your Customer,” met with a barrage of criticism because of its notion of the profiling of customers. By contrast, with the background of the 9/11 attacks, the Patriot Act defined: (1) what made up a Customer Identification Program, (2) the conduct of Customer Due Diligence (CDD), and (3) the conduct of Enhanced Due Diligence (EDD). The Patriot Act also encouraged the profiling of customers.
Traditionally, bankers saw customer risk in terms of credit risk, can the customer pay back the loan? On time? While still of vital importance in lending products, the KYC risk equals it. Is this customer related in some way to a criminal organization? A politically exposed person? Is he (or she) fronting for someone? And that’s only for individuals.
And what about businesses? Do I know who really owns the business? Is there someone on the account of whom I am unaware? That manufacturing company, who are its customers? If your business customers are involved with foreign clients, the questions just compound.