1. The Importance of an AML Programme
Simon Kingsbury

2. Much of the money is banked in Britain”
AML Background
“Corruption is bleeding Africa to death and the cost is borne by the poor.
Much of the money is banked in Britain”
Hugh Bayley MP, Chair of the United Kingdom’s House of Commons Africa All Party Parliamentary Group

3. Consequences of Poor AML Controls
Dec 16, 2009
ABN Amro -
$500MM for facilitating
movement of illegal money from
sanctioned countries
May 18, 2010
May 5, 2010
Alpari
£140,000 for inadequate AML controls
and systems;
individual AML reporting officer
fined £14,000 for breach accountability
HSBC –
$500MM possible fine for
AML/BSA violations in global
banknotes and CB business
Aug 5, 2010

4. Reputational/ Franchise
AML Considerations
Legal/ Regulatory
Social
Reputational/ Franchise
Economic

5. Strategic Importance World class AML program
Expansionist
World class AML program
Embedded culture in the business
Evidence of change for good
Well managed risk

6. Connections between financial institutions
Global banking networks connect global, regional and local financial institutions to clients of every type:
Governments and Embassies
Multi-nationals,
Top tier corporates,
Small businesses and
Individuals
Local banks are important links in the AML risk management framework.
Partnership, knowledge transference and engagement between local banks and global Banks like Citi can help both appropriately dimension risk levels and progress business relationships with confidence.

7. AML Compliance Culture
Board level focus
EMEA AML Committees
Audit
Top level Commitment
Effective Implementation
Monitoring & Review
Front Office DNA
Policies & Procedures
Risk Assessment
Due Diligence
AML Monitoring
Training
Awareness & Understanding
Business Management Oversight
Client engagement
Know Your Customer
AML Program
Risk Committees
OneCiti
AML risk assessment template
Know Your Product

8. Framework of an AML Program
The objective of the AML program is to prevent, detect and report money laundering, terrorist financing and other illicit activity.
Prevention
Detection
Reporting
The AML Program is designed in accordance with global regulatory requirements and guidance to address effective:
Policies
Processes
Personnel
Controls
Successful execution of the program requires a strong awareness of AML risks and requirements across all levels of the organization.
Account Opening
Customer Identification Program
Know Your Customer (KYC) Processes
Enhanced Due Diligence
Customer Screening
Training
Policies and Procedures
Risk Assessments
Transaction Monitoring
Alert Generation
Investigations
Client Behaviour Profiling
Periodic Reviews
Enterprise-wide Reviews
Suspicious Activity Reporting
Account Restrictions or Closures
Business Reviews
Management Information
Risk Analysis 8

9. AML Controls Three Lines of Defense First Line of Defense
Business and Support Units
Second Line of Defense
AML & Product Compliance, Legal, Compliance Testing
Third Line of Defense
Audit
Business Management
Drives a compliance culture – “tone at the top”
Ensures client on-boarding meets AML requirements
Oversees operational support units
Monitors results of internal risk assessment reviews
Support Units
Operational support for client on-boarding and renewals
AML transaction monitoring
OFAC and other list scanning
AML Compliance
Oversees implementation of the business AML Program
Provides guidance on internal policies and regulatory requirements
Reviews business and operational procedures; identifies and assesses client and product AML risk
Reviews escalated transactions and potential SAR recommendations
Product Compliance
Reviews and approves new and existing products; coordinates with overall business oversight with AML Advisory
Legal
Provides legal advice to Compliance and the business
Compliance Testing
Performs targeted and mandatory risk-based reviews of controls
Audit
Provides independent periodic assessments of the adequacy and effectiveness of internal controls