aml seminar to accountants - jfiu 4 march 2010

JOINT FINANCIAL INTELLIGENCE UNIT

Stewart McGlynn

Chief Inspector of Police

Joint Financial Intelligence Unit

AML Seminar to Accountants - JFIUAML Seminar to Accountants - JFIU4 March 20104 March 2010

JOINT FINANCIAL INTELLIGENCE UNIT

Suggested format & content detailed in JFIU website

Email

Fax

Post

Verbal (urgency - follow-up by hardcopy)

STR Filing

JOINT FINANCIAL INTELLIGENCE UNIT

Urgency

Confidentiality

Tipping Off

Crime Report Vs STR

Concerns

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Acknowledgement of Receipt File Ref. Contact Person Details

Consent / No Consent Letter

Arrest / Prosecutions / Convictions

STR Quarterly Analysis Report

Feedback

JOINT FINANCIAL INTELLIGENCE UNIT

Case Example 1

Mr. X, Chairman of Board of Directors for ABC Company

XYZ company

US$9.7M loanUS$10M pledge

Sole Owner of XYZ company is Mr. X

JOINT FINANCIAL INTELLIGENCE UNIT

Effective CDD / KYC

Good quality STR, allowing JFIU to perform its function

Protection

Learning Points

JOINT FINANCIAL INTELLIGENCE UNIT

Case Example 2 – Good Auditing Practice

Company X

Winding-up

Audit

Fraud and False Accounting

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Learning Points

Reported knowledge of Crime Proceeds – Fraud

Crime report could have been made but STR acceptable in this case

Urgency? Unsure? Contact JFIU

JOINT FINANCIAL INTELLIGENCE UNIT

Case Example 3 – Good KYC / CDD

Director of Company X

wanted in Japan

Frequent substantial withdrawals

from Bank account of Company X in Hong Kong

KYC / CDD By Accountant

for Company X

Discovery

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Learning Points

Common sense, proportionate approach to KYC and CDD

If it looks like a duck……….

No risk of prosecution

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Think About This

Poor / Negligible CDD / KYC

Absence of risk based approach

Sub Standard STR

JFIU unable to make assessment

What would you Think?

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Country Comparison STR filed by Accountants

Country 2005 2006 2007Employment in Accountancy in

2008

Singapore0/2,076

(0%)

2/3,290

(0.06%)

2/7,621

(0.03%)875

UK

14,567/

195,702

(7.44%)

9,896/

213,202

(4.64%)

8,110/

220,484

(3.68%)

N/A

HK0/13,505

(0%)

0/14,557

(0%)

3/15,457

(0.02%)3715

JOINT FINANCIAL INTELLIGENCE UNIT

STR filed by Accountants

2005 2006 2007 2008 2009

No. of STR Received

13,505 14,557 15,457 14,838 16,062

Filed by Accountant

0 0 3 6 11

Percentage (%)

0.00% 0.00% 0.02% 0.04% 0.07%

JOINT FINANCIAL INTELLIGENCE UNIT

Some Final Thoughts

JFIU understands the burden that CDD and KYC entails

Law / International Standards

Increase in quality STRs from the sector desirable – intelligence is our business

JFIU is here to help – Contact us

JOINT FINANCIAL INTELLIGENCE UNIT

Contact JFIU

Telephone:2866 3366

Fax :2529 4013

Email:jfiu@police.gov.hk

Mail:GPO Box 6555 Hong Kong

stewartmcglynn@police.gov.hk

Telephone:2860 3547