Newsletter

Your E-mail Address:

Privacy Statement

Poll

What is your Financial Institutions' main challenge?
Corporate Governance
Regulatory Compliance
Anti-Money Laundering
Risk Management
Fraud & Financial Crimes
All of the above
 

You are here: Home > Ask The Expert > Review Inquiry

Ask The Expert



Hossam M. Abd El-Rahman

Title AML Controls for Exchange Houses
Add Date 27/8/2009
Sent By Miassar
Position Assistant Manager, AML Unit
Area AML
Query Dear Hossam,

How are you? and wish you a very blessed Ramadan, I have a question regarding the Exchange companies ...please:

1. How do you ensure that the large cash transactions are not money laundering? How do you satisfy yourself to ensure genuineness?

2.Transfer of money from exchange company accounts……how to ensure that no layering/laundering is involved?

Thank you in advance

Best Regards,

Miassar
Answered By Hossam M. Abd El-Rahman
Answer Dear Miassar,

Thanks a lot for your Kind wishes, I wish you and your family: Ramadan Kareem, full of blessings, forgiveness & rewards.

Please find below the answer to your questions, which are indeed very critical and challenging:

1. To ensure that the transactions of the exchange Houses are genuine, you need to apply various AML Controls & requirements including the following:

* A proper Customer Acceptance policies & procedures when initiating a banking relation with the Exchange Houses.

* Proper Customer Identification for the Exchange Houses to ensure that they are properly licensed and operating legally.

* Classifying the Exchange Houses as "High Risk" Customers due to the nature of their operations, which requires applying "Enhanced Due Diligence Measures".

* "Know Your Customer's Customer" including knowing the customers of the Exchange House, their nationalities, their activities, ... etc and satisfying yourself that they are not engaged with illegal activities or connected to criminals, blacklisted persons/entities/countries.

* You could perform an undercover visit to the exchange house to perform address verification, get a feel about the size of their operations, type of customers, ... etc

2- To mitigate the risk of having your bank engaged in transferring money to Blacklisted/High risk countries/entities/banks/beneficiaries , you should ensure having in place an ONLINE payment/transfer monitoring tool with phonetic/fuzzy match capabilities to ensure that your bank is not violating any local or international AML regulations or violating UN, OFAC or EU blacklists requirements.

To mitigate the risk of having your bank engaged in layering activities associated with Exchange Houses, you need to have a proper profiling tool in place with proper risk matrix built, effective alert definitions/scenarios and ensure that the alerts generated are disposed of in an effective and efficient manner. The alerts that worth investigation, a proper case management should be created and proper investigations should be carried out to ensure identifying and reporting any suspicious transaction/activity in a timely manner to the FIU.

I hope the above helps and answers your questions.

Thank you for using ACC "ASK THE EXPERT" Service.

Best Regards,

Hossam Abd El-Rahman
Allied Compliance Consultants "ACC"




Login Form



Forgot your login?

New User? Register

     Advertisements


© Copyrights 2007-2010 - Allied Compliance Consultants 'ACC' - All Rights Reserved.