Anti Money Laundering Blog

Chairman of the Economic and Financial Crimes Commission (EFCC), Mrs Farida Waziri, has addressed Nigerian banks urging them to live up to their responsibility by providing the anti-graft agency true information on money laundering activities in the banking sector.

According to Mrs Waziri, cooperation with the EFCC in the fight against money laundering is in the interest of banks. She also added that the Commission was poised to reveal the genuine facts on the banking sector in order to protect the economy of Nigeria.

This was said on October 28 when a delegation of the Chartered Institute of Bankers of Nigeria (CIBN) led by  Dr. Erastus Akingbola paid her a visit in her office in Abuja. The EFCC chair said that the visit was timely, and that the banking sector was crucial in the economy. Mrs Waziri said that unfortunately corruption and money laundering was sometimes organized by the banks as when there is a money laundering case there is always an insider connection.

Recently, media discussed the threat posed by mobile banking from a personal BlackBerry or iPhone. It appeared that mobile banking might cause threats to financial institutions because criminals look for a possibility to hide their money laundering or fraud crimes behind handheld devices. It should be noted that handheld devices are relatively anonymous.

According to Steve Solberg, Senior Product Manager for Fraud at Fortent, the risk and compliance specialist, moving from cash and checks to electronic payments and now to mobile banking is a very rapid change in the payments industry, and it not only provides increased convenience and value for customers but also present new elements of risk and fraud for them.

It is projected that the mobile banking channel will explode in the next 5 years. In the United States, it is predicted to increase from 1.1 million customers in 2007 to 42.3 million in 2012.

Mobile initiatives may take off even quicker in Hong Kong, South Korea, and Brazil, as companies there tend to offer everything through mobile devices – services from payments to stock trading.

However, it should be taken into consideration that mobile banking is still in its infancy, and therefore banks are working to protect themselves and their customers from possible money laundering.

The Indian Banks’ Association (IBA) has joined efforts with 10 banks in order to improve the customer verification system and monitoring of transactions. This is made to check money laundering activities in India.

A working committee has been set up by IBA. The committee was headed by ICICI Bank Senior General Manager Sanjay Chaugle. Its task was preparing revised guidance notes on know your customer (KYC) and anti-money laundering operations.

Monitoring of transactions and record keeping in a more automated manner was given a particular attention. Record keeping is automated by means of creating a database for names to filter defaults. The focus will be put on a software that detects suspicious transactions.

The recent focus on anti-money laundering operations and know your customer is part of India’s efforts to join the Financial Action Task Force (FATF). India is going to share details of the legislation amendments with FATF by the end of the year 2008 in order to pave its way for the entry into this group by next year.

In June, the Financial Action Task Force (FATF) has issued a report and issued it on its website.

This is the 19th Annual Report of the FATF.

This report summarises advances made by the FATF in combating money laundering and terrorist financing. These are as follows:

- Financial Action Task Force policies on admission of new members and observers.
- Statements regarding the anti-money laundering/counter-terrorist financing risks posed in certain countries and areas.
- Evaluations of the anti-money laundering/ counter-terrorist financing systems of:
Canada;
Finland;
Hong Kong,
the United Arab Emirates
China;
Qatar;
Russia;
Singapore.
- Guidance on implementation of financial prohibitions to combat the threat of proliferation of WMD.
- Best practices for fighting trade-based money laundering.
- Guidance aimed to assist low capacity countries.
- Typologies reports on: TF methods; money laundering and TF vulnerabilities of commercial websites and internet payment systems; and, Proliferation financing.
- Report on national money laundering threat analysis strategies that assists countries with developing threat assessments.
- Closer work with the private sector.