Anti-Money Laundering- AREA presentation

Report
Objectives of the
AML/CFT
Compliance Unit
of the Ministry of National
Security.
• Receiving, analysing and responding to
requests and reports
from FATF and
CFATF;
• Identifying and recommending the way
forward in respect of existing deficiencies
within the AML/CFT framework;
• Cooperating and Co-ordinating with the
Cabinet appointed AML/CFT Committee
for the framing of recommendations for
the formulation of National Policy in
respect of AML/CFT.
The National AML/CFT Committee
Purpose :
To bring together all national stakeholders
to contribute the development and
formulation of AM/CFT recommendations
for policy, legislation, reforms and
implementation of action plans.
The Committee consist of: Director, (AML/CFT) Unit, Ministry of
National Security (Chair)
 Senior Legal Advisor to the Attorney
General (Deputy Chairperson)
 The Director of Public Prosecutions
 The Commissioner of Police
 The Chief Immigration Officer -Ministry
of National Security
 The Comptroller of Customs and Excise
 The
Deputy
Permanent
Secretary
-
Ministry of Finance
 The Head, Financial Intelligence UnitMinistry of Finance
 The
Head,
Financial
Investigations
Branch-Ministry of National Security
 The Head, Central Authority Unit, Office
of the Attorney General
 The Legal Adviser to the Minister of
Justice
Representatives of each of the following:
 The Legislative Drafting Department
 The Trinidad and Tobago Securities and
Exchange Commission
 The Central Bank of Trinidad and
Tobago
What is Money Laundering?
Money laundering involves taking criminal
proceeds and disguising their illegal source.
Simply put, money laundering is the
process of making dirty money look clean.
Money laundering often involves a complex
series of transactions that are usually
difficult to separate.
Three Stages in the Money Laundering
Cycle
Stage 1 Placement
The physical disposal of cash or assets
derived from criminal activity.
This phase can involve transactions such as:
• Breaking up large amounts of cash into
smaller sums and depositing them directly
into a bank account.
• Transporting cash across borders to deposit in
foreign financial institutions, or to buy highvalue goods — such as artwork, antiques, and
precious metals and stones — that can then be
resold for payment by check or bank transfer.
Stage 2 Layering
Involves the separation of illicit proceeds
from their source by layers of financial
transactions intended to conceal the
origin of the proceeds.
Transactions within this phase:
• Sending wire transfers of funds from one
account to another,
• Converting deposited cash into monetary
instruments (e.g. traveler’s checks).
• Reselling high-value goods and prepaid
access/stored value products.
• Investing in real estate and legitimate
businesses.
• Placing money in investments such as
stocks, bonds or life insurance
Stage 3 Integration
This stage entails using laundered proceeds
in seemingly normal transactions to create
the perception of legitimacy.
Effect of Money Laundering and
Terrorist Financing on the economy
• It destabilizes the economy and
financial systems
• Increased crime and corruption
• Undermining the legitimate private
sector
• Loss of tax revenue
• Reputational risk for the country
• Social Cost
Trinidad and Tobago
Legislation on Money
Laundering and the Financing
of Terrorism
Financial
Institutions
and
listed
businesses are required to have systems
in place to ensure full compliance with
the provisions of the Acts.
a)The Proceeds of Crime Act Chapter 11:27
(as amended)
b)The Financial Intelligence Unit of
Trinidad and Tobago Act No. 11 of 2009
(as amended)
c)The Financial Obligations Regulations
2010
d)The Anti-Terrorism Act 2005 (as
amended)
e)Financial Intelligence Unit Regulations
2011
POCA establishes procedures for the
confiscation of proceeds of crime and for
the criminalising of money laundering. It
also outlines the circumstances in which a
financial institution and/or its employees
shall be guilty of the offence of money
laundering.
This is dealt with in Sections 43-46
The FIU Act 2009 establishes a
department, within the Ministry of
Finance for the collection, analysis,
dissemination and exchange of financial
intelligence and information among law
enforcement
authorities,
financial
institutions and listed businesses in
Trinidad and Tobago and internationally.
The Financial Obligations Regulations
2010 establishes minimum requirements
to which financial institutions and listed
businesses must abide to ensure that they
are not used as a vehicle for money
laundering.
The Anti-Terrorism Act 2005 criminalizes
terrorist the financing of terrorism and
introduces the procedure for the freezing of
terrorist’s assets or funds.
As a consequence the suite of AML/CFT
legislation ensures that Real Estate agents
take certain steps to become compliant.
Definition of Real Estate under
POCA
Any natural or legal person,
partnership or firm carrying on the
business of buying, selling or leasing
land and any interest in land or any,
buildings thereon and appurtenances
thereto.
Risk Indicators for Real Estate Agents
• The payment of a cash deposit under a
contract and then the cancellation of the
contract for no apparent reason
• Buyers wanting to make payment in cash
• Cash is being transferred by an unrelated
third parties for the acquisition of the
property
Core requirements that will affect
real estate agents include:• customer due diligence (CDD),
• suspicious transaction reporting,
• development of a compliance
program and
• record keeping.
Customer due diligence
Real Estate agents will be required to:
• identify and verify clients
• identify beneficial ownership involving
corporate clients
• conduct on going due diligence and
transaction monitoring throughout the
business relationship
Record keeping
Real estate agents will be required to collect
information concerning, and retain records
of, their clients' identity and their on going
activities.
Reporting
Real estate agents will be required to make a
report to the Financial Intelligence Unit if
they suspect on reasonable grounds that a
client is not who they claim to be or that
information about a service may be relevant
to tax evasion, a criminal offence, proceeds
of crime or a money laundering or terrorism
financing offence.
AML/CTF program
Real Estate Agents will be required to
develop internal AML/CTF procedures and
guidelines and ensure adequate AML/CTF
staff training, in accordance with section
55(5) of the Proceeds of Crime Act
Effects on Real Estate Agents
of Trinidad and Tobago being
BLACKLISTED
• Drop in Foreigners investing in local real
estate
• Foreign wire transfers and correspondent
banking between Trinidad and Tobago
will be slowed due to applied extra
scrutiny,
• Local banks will have to spend additional
resources on scrutiny which will be
passed on to the customer
• Non-acceptance of credit cards, foreign
bank drafts, traveller cheques issued by
banks within Trinidad and Tobago
• lowering of citizens’ current standard of
living.
• US banks refusing to recognise entities
incorporated in Trinidad and Tobago
End of Presentation

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