Presented by Legal Unit

February 21, 2018

NATIONAL RISK ASSESSMENT&

MUTUAL EVALUATION REPORT

Key RisksNational Risk Assessment

Areas of VulnerabilityIMPACT RANKING**

AML Laws and Regulations (Preventive measures and supervision)

Quality of AML Supervision 1

Market Pressure to Meet AML Standards

Commitment to Good Corporate Governance

Penalties

Enforcement of AML Obligations 5

Staff Integrity 4

Staff Knowledge 1

Compliance Function

AML Monitoring Systems 3

Corporate and Trust Transparency

Identification Infrastructure 6

Availability of Independent Information Sources

**The darker the colour is, more priority the variable has.

0.60

0.70

0.70 0.60 0.60

0.600.70

0.70

0.67

0.80

VULNERABILITY MAP

0.60

0.70

0.600.60

0.69 0.60

0.60

0.60

0.50 0.70

QUALITY OF GENERAL AML CONTROLS

QUALITY OF AML OPERATIONS

COMIT. LEAD. MANAGEMENT

AML MONITORING SYSTEMS

AML REGULATIONS

Integrityof Staff

COMPLIANCE FUNCTION

Law Enforcement

Market Pressure for AML

CDD FRAMEWORK

STAFF COMPLIANCE

Enforcement

Penalties

ID Infrastructure

Corporate and Trust Transparency

Independent info Sources

Quality of Supervision

Corporate Governance

Knowledge of Staff

AML POLICIES AND PROCEDURES

0.76

0.54

0.86

0.73

0.71

0.78

0.64

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.52

0.39

0.58

0.50

0.59

0.53

0.55

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.0 0.2 0.4 0.6 0.8 1.0

Life Insurance Plans with Cash Value and…

Pure Protection Life Insurance Plans - excluding Single…

Other Insurance Plans With Cash Value and…

Pure Protection Life Insurance Plans - excluding Single…

Single Premium Life Insurance - Non-Group

Pension Products Non-Group

Non-Life Insurance Products with no Cash value or…

0

0

0

0

0

0

0

0

0

PRODUCT/SERVICE VULNERABILITY

LEGEND

Vulnerability

Inherent Vulnerability

Scenario Analysis

L

ML

M

MH

H

0.580.62

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

SECTOR VULNERABILITY

0.60

0.50

0.00

0.20

0.40

0.60

0.80

1.00

1 2 3 4 5 6 7 8 9 10

QUALITY OF GENERAL AML CONTROLS

L

ML

M

MH

H

Vulnerability Factors

Quality of the AML Supervision and StaffKnowledge

AML Monitoring Systems

Staff Integrity

Enforcement of AML Obligations

Identification Information

AML/CFT Policies and ProceduresCorporate GovernancePenalties for non-compliance

Quality of Your AML Supervision?

Knowledge of the employeesRelevant legislationCompliance Culture

Annual AML ExaminationICB’s onsite inspections and offsite monitoring programmes

AML Monitoring SystemsMust adequate and appropriate monitoring

systemsManual or SophisticatedReliance on personal recognition is not sufficient

Staff IntegrityFraudProper vetting of employeesLack of integrity leaves company

vulnerable to the criminal element.

Enforcement of AML Obligations

Enforced By Whom?Country

Individual Management Staff

Administrative Penalties, POC Bill, 2018Penal sanctions, POC Bill, 2018

Supervisory Authority/RegulatorAdministrative Penalties, i.e. Sanctions, Fines (s. 237, IA)

Identification Information

Reliable

Reliance on personal recognition

Lack of a national ID database

Non-availability to companies Independent

MITIGATION OF RISKS

Financial Transactions Reporting Bill, 2018

Proceeds of Crime Bill, 2018

Comprehensive Risk Management System

Ongoing Due Diligence

Customer Due Diligence

Compliance Officers

Concealing or Acquisition- On summary conviction - Up to 7 years imprisonment or a fine up to $500,000 - On Indictment – Up to 20 years imprisonment or a fine or BOTH

Failure to Disclose and Tipping Off- On summary conviction – Up to 12 years or a fine up

to $500,000 or BOTH- On Indictment – Up to 20 years imprisonment or a

fine or BOTH

MITIGATION OF RISKS

Enhanced Monitoring/Reporting

Review of AML/CFT Guidelines Review of AML/CFT Examination

Life Insurance Companies

General Insurance Companies

NEXT STEPS ?

BOD, Management and Staff Training

Appoint MLRO and Compliance Officer

Adequate System for Vetting of Employees

Adequate CDD and KYC policies and procedures

Conduct Risk Assessment

AML/CFT Policies and Procedures Manual

FATF RECS. DEFICIENCIES

WHAT MUST BE DONE KEY ACTIONS TO BE TAKEN

R.1 – Assessing Risk & RBA Measures have not been taken to mitigate ML/TF risks.

• Implement a risk based approach

at an institutional level.

• Implement policies, controls and

procedures which are approved

by senior management.

• Amend Legislation -FTRA

• Requirements to be included in the ICB AML/CFT Guidelines

R. 10 – Customer Due Diligence

• Ongoing due diligence.

• Require enhanced measures to identify and verify the identity of the beneficial owner of the beneficiary of a life insurance policy at the time of payout.

• Modify guidance on Simplified CDD measures --risk assessment must include an analysis of risk by the country and the financial institution.

• Amend Legislation –FTRA

• Requirements to be included in ICB AML/CFT Guidelines

CFATF MUTUAL EVALUATION REPORT

FATF RECS. DEFICIENCIES

WHAT MUST BE DONE KEY ACTIONS TO BE TAKEN

R.11 – Recordkeeping • Licensees must keep account files and business correspondence for five years after termination of the business relationship.

• Licensees must be retain the results of any analysis undertaken of an account.

• Requirements to be included in the ICB AML/CFT Guidelines

R. 12 – Politically Exposed Persons

• Require Licensees to take enhanced measures when dealing with PEPS.

• Distinguish between foreign or domestic PEP.

• Require licensees to apply measures to family members or close associates.

• Requirements to be included in ICB AML/CFT Guidelines

CFATF MUTUAL EVALUATION REPORT

FATF RECS. DEFICIENCIES

WHAT MUST BE DONE KEY ACTIONS TO BE TAKEN

R.19 – High Risk Countries • Ensure that licensees conduct Enhanced Due Diligence (EDD) and apply it proportionate to the risks from countries named by the FATF.

• Requirements to be included in the ICB AML/CFT Guidelines

R. 24 – Transparency and Beneficial Ownership of Legal Persons

Beneficial ownership information must be

maintained by companies so that they are

accurate and updated on a timely basis.

Companies must authorize a natural person

to provide BO information to, and cooperate

with competent authorities.

Supervisory authorities and licensees must

be required to keep information on BO for

five years after the date on which a company

is dissolved or otherwise ceases to exist.

• Legislation – FTRA

• Requirements to be included in ICB AML/CFT Guidelines

R. 26 – Regulation and Supervision of Financial Institutions

• Recommendation that companies be required to seek ICB approval for changes at the senior management level.

• Risk-based supervision must demonstrate that consideration was given to ML/TF risks of financial groups or country.

Legislative Amendment to Insurance Act under consideration

CFATF MUTUAL EVALUATION REPORT