Intersection of Anti-Money Laundering and Anti-Fraud Efforts

On September 23, 2008, James H. Freis, Director, US Financial Crimes Enforcement Network (FinCEN) addressed the Florida Bankers Association Town Hall Meeting about the Intersection of Anti-Money Laundering and Anti-Fraud Efforts. He noted that "acts of fraud and acts of money laundering are interconnected: the financial gain of the fraudulent activity ultimately needs to be integrated into the financial system. Therefore, money laundering is often a malignant and pernicious product of fraud. By fighting fraud, you are fighting money laundering."

What's new at the FATF?

The Financial Action Task Force (FATF) has issued a report on Money Laundering and Terrorist Financing Vulnerabilities of Commercial Websites and Internet Payment Systems. The report focuses on the type of electronic commerce identified as the most vulnerable to money laundering and terrorist financing: mediated customer-to-customer. These sites allow private individuals to sell to one another via an online marketplace. The report provides a number of case studies illustrating how such sites can be exploited for money laundering / terrorist financing purposes. (Read the current issue of FATF e-news for more information on FATF activities.)

Canada's 2008-2009 Changes to Reporting Entity Obligations

Changes to Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act and Phase 1 changes of the regulations affect reporting entity obligations (including reporting, record keeping, client identification and implementing a compliance regime). These changes were published in June 2007 and came into effect on June 23, 2008. A second phase of changes was published in December 2007 setting out the requirements for new sectors (British Columbia notaries, legal counsel and legal firms, and dealers in precious metals and stones). They will come into effect December 30, 2008. A third phase of changes was published in February 2008 dealing with new requirements for real estate developers effective February 20, 2009 and additional requirements for casinos effective September 28, 2009. A fourth phase of changes was published in June 2008, mostly about administrative monetary penalties, record keeping and client identification exemptions, and record keeping time frames. The changes affecting administrative monetary penalties will be effective December 30, 2008. The rest are effective June 23, 2008. (Details are available on the FINTRAC website.)

FATF Annual Report 2007-2008

This Annual Report provides an overview of the achievements of the Financial Action Task Force (FATF) for 2007-2008. The most important strategic outcome of the year was the approval by FATF Ministers of a revised mandate. The four principal objectives under this revised mandate are: to establish and maintain global standards and measures for countering money laundering and terrorist financing; to foster and assess the implementation of those standards; to identify money laundering and terrorist financing methods and trends; and, to expand co-operation with stakeholders and partners in order to make the system work effectively and globally. The FATF standards have now been endorsed directly by 180 jurisdictions, representing more than 85% of the world. (Read the FATF Annual Report 2007-2008.)

RBA Guidance for Accountants

This Guidance on the risk-based approach to combating money laundering and terrorist financing was developed by the Financial Action Task Force (FATF) in consultation with the accounting profession. It outlines the high-level principles in applying the risk-based approach and indicates good public and private sector practice in the design and implementation of an effective risk-based approach. (Read RBA Guidance for Accountants.)

Canada's Anti-Money Laundering & Anti-Terrorist Financing Requirements - A Guide for Chartered Accountants

Canada's Anti-Money Laundering & Anti-Terrorist Financing Requirements - A Guide for Chartered Accountants has been prepared to assist in understanding the obligations imposed by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The PCMLTFA makes it mandatory for CAs and CA firms that serve as financial intermediaries on behalf of their clients to report on certain financial transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). FINTRAC provides a significant amount of guidance in the form of Guidelines and Interpretation Notices that can assist reporting entities in keeping up with new developments that may affect them. FINTRAC also conducts ongoing outreach programs for all reporting entities. Chartered accountants and accounting firms that are subject to the legisation can keep up to date by regularly visiting the FINTRAC website and the CICA’s Online Anti-Money Laundering Resource Centre.

Money Laundering & Terrorist Financing Risk Assessment Strategies

Drawing on current examples of national threat assessments, this FATF report Money Laundering & Terrorist Financing Risk Assessment Strategies sets out key factors to be considered, including sources of data and type of assessment: risk, threat or vulnerability.