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ACAMS KYC CDD focuses on research skills—how to better assess, explore, organize, and present—in the context of customer due diligence. The primary target is the frontline analyst, teaching skills that benefit new and experienced employees, especially as regulator expec-tations increase regarding beneficial owners. This course assumes the employer has already introduced that organization’s unique roles, processes, systems, and common cases. It will use only generic forms or processes that won’t conflict with each organization’s own. To bring all learners to a shared baseline of terminology, concepts, and processes, the course starts with the “KYC CDD: Essentials” video and then builds from there.
The course is written and presented by due diligence experts working around the world. It pulls examples from many countries, and is globally appropriate. The lessons and examples are relevant to any industry. A primary focus is “financial institutions,” including banks, credit unions, insurance, MSB, securities broker-dealers, credit card issuers, alternate payment sys-tems, etc.
Course Structure
This course is offered in two delivery formats: Virtual Classroom or Self-Paced Video. The content and learner outcomes are identical, as you watch a pair of expert, industry practitioners teach you about the topic. You are allowed 4 calendar weeks to complete roughly 4 hours of coursework, including a final assessment.
• In the Virtual Classroom format, portions of the course are scheduled on specific datesand times. The live events include Q&A sessions, polling, and the ability to interactwith other learners. The dates are pre-scheduled before you purchase the course andrecordings of the session are available after each event.
• The Self-Paced video format is available 24/7/365. You have the ability to completecoursework on your own time, pausing at any time.
To successfully complete this course and earn the certificate, you must pass a short assessment. The assessment contains 20 questions. The minimum passing score is 80% andmultiple attempts are allowed. When you pass, your certificate will be available in the learning path itself and ACAMS will automatically add 4 CAMS credits to your profile.
Purpose: Teach and motivate the first two research skills (“Assess” and “Explore”).
Format: This module is offered as either ‘Virtual Classroom’ or ‘Self-Paced Video’ depending on the format you choose at time of purchase.
Structure: Packed with examples, red flags, what-ifs, poll questions, and other activities to engage and motivate the learner. Learners should be able to recall the overall skills of Assess,
Explore, Organize, Present.
1. Review of “Essentials” video
2. Research skills - Overview
a. Assess – What do you need to know?
b. Explore – Where can I find the answers?
c. Organize – How do I make my customer information meaningful
d. Present – How do I present my customer information in a manner to fulfill its purpose,i.e., aid in the detection of suspicious activity?
3. Assess
a. Who is my target audience?
i. The simple answer is regulators, but that misses the point. Your work will berelied on by others within your firm throughout the lifecycle of the customerrelationship.
ii. During transaction monitoring, others will rely on your work-product whendetermining whether observed activity/red flags are suspicious
b. What do they need to know?
c. Identify the customer
i. Understand the nature of the customer’s account
d. Identifying the customer
i. Goal: Form a reasonable belief that the customer is who it claims to be
ii. What do I need to know and what do I already have?
1. Customer Identification – Natural Person
a. Basic Identifying Information
i. Name
ii. Address
iii. Date of Birth
iv. Identification Number
b. Documentary Verification
i. The best documents are those issued by a government
1. While collecting the above information may meet the letter of thelaw, it may fail to meet the intent of the law, i.e., forming a reasonablebelief as to the identity of the customer. Final intent is to be able touse the data in determining whether a SAR/STR needs to be filed
ii. Are my efforts redundant to what others have done?
1. Check your jurisdiction and your firm’s policy about reliance provisions
2. Although reliance provisions make KYC easier, it does not necessarilyabsolve your firm from being accountable if reliance was unreasonable
iii. Did I meet the needs of each audience (as discussed earlier)?
f. What else do I need to know: Customer Due Diligence
i. The purpose of customer due diligence is to understand the nature andpurpose of the account.
ii. Information collected will be organized in a meaningful way, i.e., creating acustomer profile
iii. What is Customer Due Diligence?
1. CDD is not only about identifying your customer, but also assessingthe risks.
2. It is in conducting customer due diligence that the term “risk basedapproach” is often used
a. A risk based approach means assessing and understanding thevaried applicable risks and then taking appropriate steps tomitigate those risk to an acceptable level
iv. General categories of risk and risk factors
1. Customer
a. Line of business/occupation
b. Entity type
c. Length of incorporation, etc
2. Geography
a. Place of residence
b. Place of incorporation
c. Major place of business
d. Nationality
e. Destination of transactions/location of related account parties
v. The information collected through the customer identification most likely willnot be sufficient for purposes of understanding the nature and purpose of theaccount
4. Explore
a. Which answers to the above questions are likely from what sources?
i. Evaluating quality of sources : Primary Sources v. Secondary Sources
ii. Primary Sources - These are customer interviews, original (or verifiedduplicates) documents, and other documents/evidence provided bythe customer or otherwise certified by an authoritative third party (e.g.,government entity)
iii. Secondary Sources - These are sources other than first-hand sources/primarysources. Its reliability and veracity is not as solid. Google, Wikipedia, Facebookpage,
b. Adverse Media (Negative News)
i. Bad vs. Relevant
1. The purpose of our career is more than just preventing “bad” peoplefrom accessing the financial system
2. Adverse Media has to be relevant to either a predicate moneylaundering offense or controls related to anti-money laundering(including sanctions). This makes it relevant (material).
3. Negative News Search String
4. In the next session, we will discuss how adverse media factors into theorganization and creation of a customer profile.
ii. Bad, but not relevant
1. In the course of researching, you will come across individuals/corporations connected with domestic violence, unpopular groups,businesses that are traditionally considered immoral, and the wholegambit of possibilities
2. Knowledge Check: John Doe wants to open an account. Whenconducting a negative news search you find many different news events
iii. Cross-verify with information from public sources
f. Regulations around research methods and documentation
i. Internal processes and procedures in line with data protection laws
ii. How to document my research as I go
iii. Develop document research steps
iv. Keep track of searches done including search strings and key words used
v. Develop research notes
vi. Input information in report as I go along
vii. Positive results
viii. Negative results (absence of information)
5. Knowledge checks throughout and final assessment practice questions
6. Benefit statement: Personal, to employer, to society
7. Call to action: Practice research skills. Congratulations! You are now swimming in data.But what do you do with it? That is the next live virtual classroom.
Purpose: Teach and motivate last two research skills (“Organize” and “Present”).
Format: This module is offered as either ‘Virtual Classroom’ or ‘Self-Paced Video’ depending on the format you choose at time of purchase.
Structure: Packed with examples, red flags, what-ifs, poll questions, and other activities to engage and motivate the learner. Learners should be able to recall the overall skills of Assess, Explore, Organize, Present.
1. Continue the story arc
a. Characters (with learner as frontline KYC analyst)
b. Situation
c. Cliffhangers at KYC analyst decision-points
2. Review of “Finding Answers” session
3. Research skills
4. Organize
a. Data does not become really meaningful until it is organized in a meaningful way (e.g.,Bloomberg relies on publicly available data for the most part, but it becomes valuableas it is organized in a meaningful and accessible way)
b. Develop report template and research topics
c. Structure research notes into report format
d. The Customer Risk Rating Model: Linking Questions to Answers
i. Inputs
1. The CRR Model is used to risk rate your customer into risk categories,generally high, medium, or low (or some variation)
2. For every risk factor, the analyst should be able to link informationgathered during the Explore step
3. Every piece of information inputted into the CRR model should have aclearly identifiable source
ii. Common Risk Factors
1. Suppliers/Dealers
iii. Identifying Gaps in Research
1. Common concern is that analysts don’t want to burden customers withinquiries or otherwise cause a burden for account opening and scarethe customer to somewhere else
2. Make a list of follow-up research steps to fill the gaps and answerunanswered questions
vii. What kind of a due diligence product do we need?
viii. Public records only or also source enquiries (also knownas Business Intelligence or Corporate Intelligence)
5. Enhanced Due Diligence research tools
a. Importance of indirect search
b. Additional useful internet sites
c. Social media
d. Deep web searches
e. Media sources in country
f. Litigation sources
g. In-country sources
h. Build table - All the things already done in left-hand column– new points in right column. Need to have your procedure– revert to procedure regarding the topic of enhanced duediligence and outsourcing
6. Other issues
a. Any indirect links to PEPS or other high risk individuals/entities,sectors, products etc.
e. Periodic refreshes / monitoring requirements
f. This “Organize” step iterates with Explore step until results are adequate
5. Present
a. Document, document. document
b. Creating a customer profile
i. Drafting
1. How to structure a KYC summary?
a. Identify key issues of concern
b. By Risk Category
c. By highest risk factors to lowest risk factors
d. Some other means
2. How to write succinctly
3. What to escalate?
4. Appealing to an internal auditor and/or external audiences
8. Exceptions or irregularities in the onboarding process
9. Any red flags
10. Source all information using hyperlinks or reference to where theinformation was retrieved (e.g. NYT, 3. April 2016)
c. Structure the information
1. State which information was found and where it was retrieved from
2. State which information could not be retrieved and why not (e.g.litigation records in Germany are not publicly available and couldtherefore not be searched)
3. Summarize key findings
4. Outline recommendations and risk mitigation measures
i. How to structure a compelling case
1. Structure the information
2. State which information was found and where it was retrieved from
3. State which information could not be retrieved and why not (e.g.litigation records in Germany are not publicly available and couldtherefore not be searched)
4. Summarize key findings
5. Outline recommendations and risk mitigation measures
ii. How to write succinctly
1. Short sentences
2. Check out style guides
iii. Use visualization tools for ownership structures if appropriate
iv. What to escalate
v. Appealing to internal and/or external audiences
1. Summary includes everything relevant for senior management
2. PowerPoint presentations if necessary for workshop/discussion
vi. Remember why we are doing this and come back to the former topics. Touchon who the audiences are - we talked about the regulator what do we have totell them – think of how you might want to talk to the regulator but becausemy audience is this I also need to say the following – they should feel confidentthat their approach will work for all audiences
d. Maintaining the Customer Profile
i. Periodic (1,2,3)
ii. Event Triggered
1. Filing of SAR
2. New signatories
3. New line of business
4. New use of product
e. Terminating the customer relationship/off-boarding
i. When you terminate someone you need to document that you did it for anAML purpose – otherwise the regulator will not credit you – have to presenta strong case - the issue in order to solve discrepancy. De-risking - Work withyour organization legal department on how to do that – only little time on this.
6. Red flags (worked in throughout the entire course)
a. Typical red flags per customer, country, sector, product
b. Can red flags be mitigated or can the risk be managed
c. Develop excel table to build red flag typologies based on results and new red flagsidentified in own research
7. Case examples, practices, and polls throughout – especially beneficial ownership
a. Case studies highlighting research question, research approach, red flags identified,risk assessment
b. Regions/Topics for case studies
i. Western Europe (ongoing litigation identified in deep web and criticalcomments on social media)
ii. Eastern Europe (corruption / issues of PEPS and not transparent UBO)
iii. Middle East (CFT allegations / PEP issues, political situation (e.g. Arab Spring)
iv. Africa (Angola or DRC – correspondent banking, transparency source ofwealth)
8. Knowledge checks throughout and final assessment practice questions
9. Benefit statement: Personal, to employer, to society