AML Corporate Governance Are boards getting the right level of www.pwc.com information?
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AML CorporateGovernance
Are boards getting theright level of
www.pwc.com
right level ofinformation?
Agenda
1. Setting the scene – what drives responsibilities?
2. Consequences when things go wrong
3. Board responsibilities
4. NED Survey - where do they get their comfort from?
PwC
4. NED Survey - where do they get their comfort from?
5. What issues do we find in practice?
6. How could these issues be rectified/ prevented?
AML Corporate GovernancePwC 2
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Setting the scene – what drives responsibilities?
PwCAML Corporate GovernancePwC 3
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Consequences when things go wrong
26 March 2012FSA issues £8.75m fine
For failing to take reasonablecare to establish and maintain
effective AML systems andcontrols 15 May 2012
FSA fines bank £525,000For anti-money laundering
control failings
PwC
Civil penalties – 3 April 12JFSC published a consultationpaper proposing that a power
be introduced to allow toimpose civil penalties
AML Corporate GovernancePwC 4
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15 May 2012FSA fines MLRO £17,500
For anti-money launderingcontrol failings
Board responsibilities – AML Handbook
Business risk
assessment
(“BRA””)
Formal
strategy based
on BRA
Considerbarriers that exist
that will prevent theoperation of effective
Notify theCommission
immediately inwriting of any
material failures
Board
Strategy
Implementation
PwC
on BRA
Use from BRA &strategy to
demonstrateexistence ofsystems &controls
Documentsystems &
controls andclearly apportionresponsibilities
Assesseffectiveness and
compliance & takeprompt action to
address defi-ciencies.
operation of effectivesystems and controls
Boardresponsibilities
Monitoring
Reporting
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Survey - Where do NEDs get their comfort overcompliance with AML laws and regulations from?
P & PAddresses
legislation
Implemented
& understood
PwC 630 May 2012AML Corporate Governance
R
e
p
o
r
t
i
n
g
Compliance
reporting
Compliance
monitoring
A
s
s
u
r
a
n
c
e
Compliance
function
Internal
audit
Where do NEDs get their comfort over compliancewith AML laws and regulations from?
58%
52%
48%
42%
39%
48%
10%
3%
Detailed compliance reporting
P & P fully addresses legislation
Strong compliance function
PwC
Source: Survey of over 30 NEDs in the Channel Islands
48%
45%
42%
26%
48%
45%
48%
39%
3%
10%
10%
16% 13% 6%
Strong compliance function
P&P fully implemented
Compliance monitoring programme
Internal audit function
Strongly agree Agree Neither agree or disagree Disagree Strongly disagree
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What issues do we find in practice?
Lack of
Text
Policies &procedures
not effectivelyimplemented
Inconsistent
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Lack ofintegratedsystems forclient take-on & MI
Lack of acompliancemonitoringprogramme
Ineffectiveboard
oversight
Inconsistentcompliancereporting
to the board
830 May 2012AML Corporate Governance
How could these issues be rectified/ prevented?
TextPolicies &
procedureseffectively
implemented
QualitySystemsSophisticated
On-boarding &
PwC
Qualitymanagementinformation
Comprehensivecompliancemonitoringprogramme
EffectiveBoard
oversight
Qualitycompliancereportingto the board
930 May 2012AML Corporate Governance
Complianceproviding theright level info
Systemsproducing info
On-boarding &CRM system
Right level ofinfo going intoabove system
A few questions for boards?
• How long does my average AML take-on procedure take?
• Is this client going to be profitable once I factor in the compliancecost?
• Do I know where AML really sits on my staff’s priority list?
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• Do I know if I’ve got staff in need of additional AML training?
• Do we use our AML framework to restrict our BD strategy totargets we know we can actually take on?
Contact
Chris van den Berg
Senior manager
PricewaterhouseCoopers (Channel Islands)
Tel: +44 1534 838 308
PwC 1130 May 2012AML Corporate Governance
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