prevention of money laundering and terrorism financingprevention of money laundering and terrorism...

Agosto2005

PREVENTION OF MONEY LAUNDERING AND TERRORISM PREVENTION OF MONEY LAUNDERING AND TERRORISM FINANCING.FINANCING.

BBVA’SBBVA’S RISK MANAGEMENT MODELRISK MANAGEMENT MODEL

April 25April 25thth, 2008, 2008

KeepingKeeping inin mindmind......

BBVA is an international financial services group

Branches8.028 Countries

37Employees111.913

•A full range of financialproducts & services

Shareholders1.0m Market cap

€62.8bn+

Total assets€502bn+

Data as of Dec-07


BBVA is an international financial services group

Assets (EUR Bn.)

Capitalisation (EUR Bn.) 62.8

Net attributable profit (EUR Bn.) 6.1

ROE (%) 34.2%

Branches 8 028

- Spain 3 595

- Americas 4 291

Staff 111 913

- Spain 31 106

- Americas

- Rest of the World 142

- Rest of the World

31/12/2006 31/12/2007

78 805

411.9

64.8

4.7

36.4%

7 585

3 635

3 797

153

98 553

30 582

66 146

1 825

502.2

2 002

Key Financial Figures

•Banking•Pension-FundCompanies•Insurance•Private Banking•Asset Management•Real Estate •Internet Banking•Correspondent Banking•Money TransferServices

••BankingBanking••PensionPension--FundFundCompaniesCompanies••InsuranceInsurance••PrivatePrivate BankingBanking••AssetAsset ManagementManagement••Real Estate Real Estate ••InternetInternet BankingBanking••CorrespondentCorrespondent BankingBanking••MoneyMoney TransferTransferServicesServices

DIVERSITY OF DIVERSITY OF BUSINESSBUSINESS


……….with a leading position in Latin America

Puerto RicoBBVA Puerto RicoRank : 5th

BBVA share: 100%Branches: 45

ArgentinaBBVA Banco FrancésRank : 2nd


ColombiaBBVA ColombiaRank : 3rd


PeruBBVA Banco ContinentalRank : 2nd


ParaguayBBVA ParaguayRank : 5th


UruguayBBVA Francés UruguayRank : 6th


PanamaBBVA PanamaRank : 5th


ChileBBVA ChileRank : 4th


VenezuelaBBVA Banco ProvincialRank : 2nd


MexicoBBVA BancomerRank: 1st


BrazilBradesco transactional bankingBBVA Rep. Office in Sao PaoloFinance and Investment banking


NJ

RI

DEDC MD

MANYVT

VA

NC

TXLA

ID

IN

KYWV

AL

CO

NMAZAR

CA

FL

GA

IA

ILKS

MEMI

MN

MO

MS

MTND

NE

NVOH

OK

OR

PA

SC

SD

TN

UT

WIWY

WA

• $47 Bn. in Assets• $32 Bn. in Credits• $33 Bn. in Deposits• 622 branches in 7 States• 19º Bank in the US by

MktCap• 101 million people in the

area• Pop. growth 2005-2010:

11,8% vs. 6,7% national average

• $47 Bn. in Assets• $32 Bn. in Credits• $33 Bn. in Deposits• 622 branches in 7 States• 19º Bank in the US by

MktCap• 101 million people in the

area• Pop. growth 2005-2010:

11,8% vs. 6,7% national average

Compass Texas Regional Laredo National State National BBVA USA

State Branches

$ BnDeppsitsTexas 326 19,6

6,73,22,00,70,60.1

Alabama 90

California 33

Arizona 75Florida 44Colorado 33NewMexico

21

… with a strong position in the USA: nº1 Regional Bank in the “SunBelt”

C

B

1

A2

3 C

B

1

A2

3

From To LATAM (1) To Asia (2) To Africa (3)USA (A) 25,299 12,154 6,197

EUROPE (B) 16,953 23,334 20,739

GULF COUNTRIES (C) 2,325 17,225 13,172

43,650

61,650

34,05045,153

56,355

40,864

KeepingKeeping inin mindmind........remittances are a relevant business and a truly global factor..

150 B. US$ are sent every year through three maincorridors

KeepingKeeping inin mindmind......…Asia is an important milestone for BBVA presence…

Strategic alliance with China CITIC Bank and CITIC InternationalFinancial Holdings Limited

All data as of 2005Source The People's Bank of China 2005

E a s t M id d leW e s t N o rth e a s tE a s tE a s t M id d leM id d leW e s tW e s t N o rth e a s tN o rth e a s t

GDP by region

GDP growth

º ÚÁ ú½ -H e ilo n g jia n g

¼ ªÁ ÖJ ilin

Ä ÚÃ É¹ ÅIn n e r M o n g o lia

Á ÉÄ þL ia o n in gº Ó± ±

H e b e i

É ½Î ÷S h a n x i É ½¶ «

S h a n d o n g

º ÓÄ ÏH e n a n

½ -Ë ÕH a n g s u

° ²» ÕA n h u i

Õ ã½ -Z h e jia n g½ -Î ÷

J ia n g x i¸ £½ ¨

F u jia n

º þÄ ÏH u n a n

º þ± ±H u b e i

É ÂÎ ÷S h a a n x i

Ë Ä́ ¨S ic h u a n

¹ ó́ ¨G u iz h o u

¹ ãÎ ÷G u a n g x i ¹ ã¶ «

G u a n g d o n g

º £Ä ÏH a in a n

Ô ÆÄ ÏY u n n a n

Î ÷² ØT ib e t

Ð Â½ ®X in jia n g

Ç àº £Q in g h a i ¸ ÊË à

G a n s u

Ä þÏ ÄN in g x ia

º ÚÁ ú½ -H e ilo n g jia n g

¼ ªÁ ÖJ ilin

Ä ÚÃ É¹ ÅIn n e r M o n g o lia

Á ÉÄ þL ia o n in gº Ó± ±

H e b e i

É ½Î ÷S h a n x i É ½¶ «

S h a n d o n g

º ÓÄ ÏH e n a n

½ -Ë ÕH a n g s u

° ²» ÕA n h u i

Õ ã½ -Z h e jia n g½ -Î ÷

J ia n g x i¸ £½ ¨

F u jia n

º þÄ ÏH u n a n

º þ± ±H u b e i

É ÂÎ ÷S h a a n x i

Ë Ä́ ¨S ic h u a n

¹ ó́ ¨G u iz h o u

¹ ãÎ ÷G u a n g x i ¹ ã¶ «

G u a n g d o n g

º £Ä ÏH a in a n

Ô ÆÄ ÏY u n n a n

Î ÷² ØT ib e t

Ð Â½ ®X in jia n g

Ç àº £Q in g h a i ¸ ÊË à

G a n s u

Ä þÏ ÄN in g x ia

Taiwan

13.1%

12.6%12.8%

12.0%

11.4%11.6%11.8%12.0%12.2%12.4%12.6%12.8%13.0%13.2%

East

Middle

West

Northeast

55%

19%

17%

9%

East

Middle

West

Northeast


…BBVA is a global player…

Spain IndonesiaHong Kong

USA

Mexico

North America

Europe

Asia

South America

Portugal

Germany

Italy

UKFrance

Belgium

Switzerland

Russia

Argentina

Colombia

UruguayChile

Panama

Perú

Beijing

Singapore

ShanghaiJapan

Bolivia

Puerto Rico

Brasil

Cuba

Ecuador

Korea

Paraguay

Venezuela

India

Australia

DIVERSITYOF

COUNTRIES

DIVERSITYDIVERSITYOFOF

COUNTRIESCOUNTRIESREGULATIONSREGULATIONSREGULATIONS TYPES OF

CUSTOMERSTYPES OFTYPES OF

CUSTOMERSCUSTOMERSBUSINESS

RELATIONSBUSINESSBUSINESS

RELATIONSRELATIONSSUPERVISORY

AGENCIESSUPERVISORYSUPERVISORY

AGENCIESAGENCIES

11-S11-S

Due Diligence onBanking Customers (BIS)

8 Special RecommendationsOn Terrorist Financing(FATF/GAFI)

Oct 2001 Oct 2002

The use of nonprofit organizations to finance terrorist activities(FATF/GAFI)

Feb 2003

General Guide forAC & IC (BIS)

Jun 2003

The 40 Recomendations(FATF/GAFI)

Oct 2004

Consolidated “KYC” RManagement(BIS)

USA PATRIOT Act

Dic 2001

Directive 2001/97

May 2003

Customer Identification Program

Sep 11th

Jul 2004

Report to the US Senateon the Riggs Bank Case

Feb 2001

Report to the USA Senate on InternationalCorrepondent Banking Services

March 11th

Directive 2005/60.

SpecialRecomendation# 9 Regarding the

Financing of Terrorism(FATF/GAFI)

Nov 2005Mar 2005

Report to the US SenateThe Pinochet accounts inRiggs Bank


The beginning of a new trend:- AML regulations converge worldwide- Increasing requirements from supervisory agencies.- Change in the entities´ role: Service Providers + “watchdogs”

The beginning of a new trend:- AML regulations converge worldwide- Increasing requirements from supervisory agencies.- Change in the entities´ role: Service Providers + “watchdogs”


OFFSHORE CENTERS(IDENTIFIED BY THE IMF - DRUGS PRODUCERS – TOP 50 CORRUPT

JURISDICTIONS -

IDENTIFIED BY THE FATFAS JURISDICTIONS WITH AML/CTF DEFICIENCIES -

Date Source FiguresFMI Money laundering amounts to 2%-5% of the

World’s GDPMoney laundering amounts to 2,5%-6,3% of the GDP in South America.Illicit money amounts to 17%-25% of the World’s GDP.Money laundering worldwide is bigger than theGDP of 88% countries in the world.The Mafia is responsible for 7% of the ItalianGDP.

FMI

FMI

ONU

Italy

2005

2005

2008

2007

2007


Some figures………..Some figures………..

……each company must define its strategy to prevent each company must define its strategy to prevent money laundering and terrorism financing activities…money laundering and terrorism financing activities…

“As a financial group providing services to millions of people and conducting its activities in different social environments to whose well-being it is committed, BBVA cooperates fully with governmental bodies, international agencies and other organizations in the fight against drug trafficking, terrorist activities and other forms of organized crime.”

“As a financial group providing services to millions of people and conducting its activities in different social environments to whose well-being it is committed, BBVA cooperates fully with governmental bodies, international agencies and other organizations in the fight against drug trafficking, terrorist activities and other forms of organized crime.”

BBVA GROUP CODE OF ETHICS BBVA GROUP

CODE OF ETHICS

OUR ASSUMEDCOMMITMENT

OUR ASSUMEDCOMMITMENT

PRESERVING OURCORPORATE INTEGRITY

PRESERVING OURCORPORATE INTEGRITY

MAINTAINING THE CONFIDENCEOF OUR CLIENTS,

SHAREHOLDERS, EMPLOYEES, PROVIDERS,...

MAINTAINING THE CONFIDENCEOF OUR CLIENTS,

SHAREHOLDERS, EMPLOYEES, PROVIDERS,...

ToTo promotepromote and preserve the and preserve the welfarewelfare of the of the communitiescommunities ininwhichwhich wewe conductconduct businessbusiness

ToTo prevent our products and prevent our products and services fromservices from being used for being used for

illicitillicit endsends

……and Antiand Anti--Money Laundering is a top priority for the Money Laundering is a top priority for the BBVA Group.BBVA Group.

Money Laundering & Terrorism FinancingMoney Laundering & Terrorism FinancingRisk Management MODELRisk Management MODEL

SatisfyingSatisfying bothboth goalsgoals meansmeans ......

... having a strong cooperation with national and international ... having a strong cooperation with national and international agencies in agencies in fighting organized crimefighting organized crime

... and having several specialized elements (policies, ... and having several specialized elements (policies, procedures, structure and resources) procedures, structure and resources) combinedcombined in a:in a:

... with the ... with the mitigationmitigation of REPUTATIONAL RISK as the of REPUTATIONAL RISK as the cornerstone of the Model.cornerstone of the Model.

REPUTATIONAL RISKReputational risk is defined as the potential impact that adverse publicity regarding a bank business practices and associations, whether accurate or not, will cause a loss of confidence in the integrity of the institution, due to:

•The probability of its products and services being used for illicit purposes.•The failure to comply with the AML law and regulations,

REPUTATIONAL RISKREPUTATIONAL RISKReputational risk is defined as the potential impact that adversReputational risk is defined as the potential impact that adverseepublicity regarding a bank business practices and associations, publicity regarding a bank business practices and associations, whether accurate or not, will cause a loss of confidence in the whether accurate or not, will cause a loss of confidence in the integrity of the institution, due tointegrity of the institution, due to::

••The probability of its products and services being used for illiThe probability of its products and services being used for illicitcitpurposes.purposes.••The failure to comply with the AML law and regulations,The failure to comply with the AML law and regulations,

... particularly the one associated with Legal and Regulatory Ri... particularly the one associated with Legal and Regulatory Risk, is sk, is the one who represents the highest threat of eroding shareholderthe one who represents the highest threat of eroding shareholder

value.value.

...understanding this risk as......understanding this risk as...

... transcends geographical borders and corporate legal responsi... transcends geographical borders and corporate legal responsibilitybilitylimits.limits.

... the association of an institution... the association of an institution-- by action or omissionby action or omission-- with money with money laundering or with the financing of terrorist activities.laundering or with the financing of terrorist activities.

Regulation ManagementRegulation Management

......there are two types of management approachesthere are two types of management approaches ......

Risk ManagementRisk Management

ReferenceReferenceRules and regulations, Rules and regulations,

guidelines and best guidelines and best practicespractices

Local Regulation

Organized on the basisof legally required

developments

BasedBased onon ““RiskRiskassessmentsassessments””

Static: it changes only when required by changes to legal

requirements

Dynamic: evolves based Dynamic: evolves based on the changing on the changing

requirements of a broad requirements of a broad environmentenvironment

Reactive and isolated, with the focus on ‘legal coverage’

ProPro--active with a active with a systematic vision of risk systematic vision of risk

managementmanagement

ModelModel featuresfeatures

1. Reduce the probability that the entity could be seen as an “accesible” vehicle for being used in money laundering or terrorism financing operations.

2. Reduce introduction and contagion risks, and increase the effectiveness of the institution’s detection systems to reduce the impact of any operation potentially linked with illegal activities.

…… GOALSGOALS of our of our Risk ManagementRisk Management Model:Model:

3. Reduce the negative effects in the event that any operationlinked with illegal activities could arise.

Four components of BBVA’s AML ModelFour components of BBVA’s AML Model

ORGANIZATIONALORGANIZATIONALSTRUCTURESTRUCTURE

POLICIES,POLICIES,PROCEDURESPROCEDURES

& INTERNAL & INTERNAL CONTROLSCONTROLS

COMMUNICATIONCOMMUNICATIONAND TRAININGAND TRAINING

IND

EPEN

DEN

T R

EVIE

WIN

DEP

END

ENT

REV

IEW

Responsibilities andfunctions clearly defined

throughout the Organization

11

22

33

44

POLICIES defined on a global basis

PROCEDURES adapted locally

CONTROLS executed locally

Basic lines defined on a global basis and executed

locally

ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE(Functions and Responsibilities)(Functions and Responsibilities)

11

Outlined in a Corporate AML & CTF Model that Outlined in a Corporate AML & CTF Model that establishes...establishes...

BODIES “AD-HOC” REQUIRED BY THE

MODEL

RESPONSIBILITIES AND FUNCTIONS

THROUGHOUTTHE ORGANIZATION

• BOARD OF DIRECTORS• SENIOR MANAGEMENT• MANAGERS AND

EMPLOYEES• COMPLIANCE• INTERNAL CONTROL• INTERNAL AUDIT• …/…

• AML&CTF MEETINGS• COMMUNICATION AND

PROMOTION OF POLICIES

• TRAINING OF ALL EMPLOYEES

• TERMINATION OF BUSINESS RELATIONS


11

Chairman &CEO

President & COO

ChairmanChairman’’ssareasareas

General Sec.Legal, Tax, Audit

andCompliance

ServicesEduardo Arbizu

Image &Comunication

Chairman’s office

Accounting &Consolation

InstitutionalAffairs

BusinessBusinessUnitsUnits

HR, IT &Operations

GlobalBusiness

Area

Spain & Portugal Innovation &

DevelopmentMexico South America

USA

CFO Risk

IT PROJECTSLATAM & ASIACOORDINATION

GLOBAL COMPLIANCEAntonio del campo

ASIA

COMPLIANCE STRUCTURE IN OTHERS

JURISDICTIONS

EUROPE USA MEXICO LATAM

HEAD OF LEGAL, TAX, AUDIT AND COMPLIANCESERVICES

Eduardo Arbizu

GLOBAL AML/FAT

Hierarchichal Reporting lineFunctional ReportingLine

AUDIT AND COMPLIANCE

COMMITTEE OF THE BOARD OF

DIRECTORS

Periodic reporting

GLOBAL BUSINESS INTEGRITY

PROCESSESMANAGEMENT


11

MONITORINGSYSTEM &

TECHNICALSUPPORT

INTEGRITYPOLICIES & PROGRAMS

AML/FATPROGRAMS

AML/FATSPAIN

BOARD OF DIRECTORS

SupervisionSupervisionof AML&CTF of AML&CTF

relevantrelevantissuesissues Timely

correction of situationsreported by …

Yearly ActionPlan of the ComplianceArea approved by theCommittee

SupervisoryAgencies

Internal Audit or ComplianceAML&CTF

COMMITTEES

Ensure the effectiveness of the AML & CTF Model


11

COMPLIANCE AND AUDIT

COMMITTEE

AML-CFTDEPARTMENT

BOARD OFDIRECTORS

COMPLIANCE AND AUDIT COMMITTEE


11

AML&CTFCOMMITTEES

Responsible for implementation within the Responsible for implementation within the business units of the AML & CTF Modelbusiness units of the AML & CTF Model

Promoting the development of systemsand procedures to ensure the effectiveness of those internal rules

The issue of internal rules to develop Corporates Policies.

Supervision and control of developments and procedures.

AML-CFTDEPARTMENT

DelegatedFunctions


11

BOARD OFDIRECTORS

COMPLIANCE AND AUDIT COMMITTEE

AML-CFTDEPARTMENT

AML&CTFCOMMITTEES

Administration and control of Administration and control of screeningscreening andandmonitoring processes.monitoring processes.

Analysis and investigation of activities at risk of Analysis and investigation of activities at risk of being tied in with illegal activities or lacking any being tied in with illegal activities or lacking any apparent licit purpose.apparent licit purpose.

Report to the local F.I.U. of suspicious transactions.Report to the local F.I.U. of suspicious transactions.

Development of contents of Training Program Development of contents of Training Program activities and channelsactivities and channels

Supervision of Training Program implementation.Supervision of Training Program implementation.

INTERNAL CONTROLS AND PROCEDURESINTERNAL CONTROLS AND PROCEDURES22

CORPORATECORPORATEPOLICIESPOLICIES

INTERNALINTERNALCONTROLS AND CONTROLS AND PROCEDURESPROCEDURES

... and BBVA’s... and BBVA’s ...... ... are the framework ... are the frameworkof AML & CTF Model.of AML & CTF Model.

They are developed bearing in mind…They are developed bearing in mind…

Phases of customer relationship processCustomer Segmentation

Nature of the economic activityof the customer

Types of financial services & products delivered to our

customersThe degree of risk will vary accordingThe degree of risk will vary accordingto the product/service or amount of to the product/service or amount of funds potentially funds potentially involvedinvolved in our in our businessbusiness relationshiprelationship with the with the customer.customer.

TheThe probability that the probability that the the economic the economic activity of the customeractivity of the customer maymay havehave anan

illicitillicit purposepurpose or may or may serveserve as a as a vehicle for money launderingvehicle for money laundering


……and from the combination of both variables, results:and from the combination of both variables, results:

CONSUMERS

REST

RELEVANT

PRIVATE BANKING OFF SHORE DOMESTIC

HIGH RISK ECONOMIC ACTIVITIES REPUTABLE REST

CUST

OMER

S FINA

NCIA

LNO

N FI

NANC

IAL

WITHOUT TRANSACTIONAL ACTIVITIES

REST

MONEY TRANSMITTERS AND EXCHANGE HOUSES

FOREIGN BANKSWITH

TRANSACTIONALACTIVITIES

LARGE TRANSACTIONALACTIVITIES


Policies Procedures

Inde

pend

ent

Rev

iew

OrganizationalStructure

Policies,Proceduresand Internal

Controls

Communication and Training

CustomerAcceptance Policy

CorrespondentBanking Corporate

PolicyPolitically Exposed

Persons (PEPs)

Training Policy

Monitoring

Filtering

Reporting

...

Identification

Verification and knowledge of the

economic activity of the customer

Controls

Policiesand

Procedures

Private Investment Companies

Customer Accounts Opened by non financial

intermediaries

Alert Review Procedure

Further Investigation Parameters or re-profile

Investigation Procedure

SAR Committees’ andFiling Procedures

...

...

...

...


...We...We havehave developed the developed the followingfollowing policies :policies :

Customer AcceptanceCustomer AcceptancePolicyPolicy

CorrespondentCorrespondent BankingBankingPolicyPolicy

PoliticallyPolitically ExposedExposedPersonsPersons ((PEPsPEPs))

Training PolicyTraining Policy

IdentificationIdentification

Verification and Verification and KnowledgeKnowledge ofofthe Economic Activity of the the Economic Activity of the

CustomerCustomer

PrivatePrivate InvestmentInvestment CompaniesCompanies

CustomerCustomer AccountsAccounts openedopened bybyNon Financial Non Financial IntermediariesIntermediaries

ExchangeExchange HousesHouses and Money and Money TransmittersTransmitters

CorrespondentCorrespondent BankingBankingCorporate PolicyCorporate Policy


...We...We havehave adoptedadopted thethe followingfollowing procedures:procedures:

Customer AcceptanceCustomer AcceptancePolicyPolicy

CorrespondentCorrespondent BankingBankingCorporate PolicyCorporate Policy

PoliticallyPolitically ExposedExposedPersonsPersons ((PEPsPEPs))

AppliesApplies toto allall correspondentcorrespondentrelationshipsrelationships withwith foreignforeign banksbanks

DecisionDecision appliesapplies to BBVA entitiesto BBVA entitiesworldwideworldwide

•• No Shell No Shell BanksBanks•• NoNo PayablePayable ThroughThrough AccountsAccounts

•• RejectionRejection ofof wirewire transferstransfers withoutwithoutproperproper sendersender identificationidentification

RiskRisk--basedbased Due DiligenceDue Diligence

Training PolicyTraining Policy


Iden

tific

atio

n

Scre

enni

ng

Ass

igm

ent t

oSe

gmen

t Recording&

VerificationProcedures

DetectionProcesses

Monitoring Aná

lysi

s

Com

unic

atio

n

Customer Admission Process Transactional Activity

Other Risk ManagementProcesses

Management ofSuspicious

Activities

PHASES OF BBVA CUSTOMER RELATIONSHIP PROCESS

CustomerAcceptance

Policy

Specificrules fortype of

customer Compliance Departmentrules and procedures

General prevention rulesInternal analysis & reporting

Inve

stig

atio

n

Activities of the AMLCompliance Department

Scre

enni

ng

AML processes associated to theAML processes associated to the phasesphases of BBVA customer of BBVA customer relationshiprelationship process :process :


AMLAML SystemsSystems

CUSTOMERCUSTOMERADMISSIONADMISSION

CUSTOMER ACTIVITY ANALYSISCUSTOMER ACTIVITY ANALYSIS

M T SM T S DATAMARTDATAMART

• Provide Black lists and PEPslist

• Provide the algorithms to checkcustomeractivity

• MonitoringInternationalMoney Transfers Activity

INTERNAL CONTROLS AND PROCEDURESINTERNAL CONTROLS AND PROCEDURES

FILTERING TOOL FILTERING TOOL -- FIRCOSOFTFIRCOSOFT

FILTROBATCH

Firco Files FilterLists

Rules

AlertsBatch

Firco FilesFilter Verify

Web

BB.DD. X

BB.DD. Z

BB.DD. Y

…COMPLIANCE

22

INTERNAL CONTROLS AND PROCEDURESINTERNAL CONTROLS AND PROCEDURES

MANTAS “Money Laundering Monitor” (MLM) is a system developed for AML requirements. With

several scenarios available and data-miningtechniques, Mantas MLM allows to detect

patterns of behaviour.

22

MONITORING TOOL MONITORING TOOL -- MANTASMANTAS

World Bank


AMLAML SystemsSystems –– Global StrategyGlobal Strategy

Madrid HUB

Mexico HUB

Data Miners

Data MinersAnalysts

Analysts

Analysts

Analysts

Analysts

Analysts

AMLDepartment

Branches

HUB

MANTASCustomers

&Accounts

MonitoringMonitoring MainMain WorkflowWorkflow

Country A Mexico or Spain

Transactions

Alerts

FIU


Employees and managers must be familiar Employees and managers must be familiar with the policies adopted and the rules and with the policies adopted and the rules and

procedures in placeprocedures in place

Improve their ability to detect and report Improve their ability to detect and report situations which might expose the institution situations which might expose the institution

to the money laundering riskto the money laundering risk

An EffectiveAML & CTF

Communicationand Training Strategy toPromote a

ComplianceCulture

COMMUNICATION AND TRAININGCOMMUNICATION AND TRAINING33

The efficiency of the Risk Management Model The efficiency of the Risk Management Model rests mainly onrests mainly on thethefollowing factors:following factors:

IndependentReview

Strict application of the relevant policies, rules Strict application of the relevant policies, rules and proceduresand procedures


COMMUNICATICOMMUNICATION PROCESSON PROCESS

Communicate new developments or changes in the Communicate new developments or changes in the legal framework and internal regulations.legal framework and internal regulations.

CommunicateCommunicate new patterns of suspicious new patterns of suspicious behaviourbehaviourdetected by Compliance and answers to FAQdetected by Compliance and answers to FAQ

ToTo keepkeep allall employeesemployees informedinformed of new of new lawslaws andandregulationsregulations

ToTo maintainmaintain anan appropiateappropiate levellevel ofof sensitivitysensitivity


TRAININGTRAININGPROCESSEPROCESSE

SS

IdentifyingIdentifying trainingtraining needsneeds according to the exposure to the according to the exposure to the money laundering risk of their job. money laundering risk of their job.

TargetingTargeting the type of training activities to the type of training activities to theirtheir needsneeds..

Internal processes

Central Services

Employees with little exposure to moneylaundering risk

Employees executing transactions in contact with clients

Employees with specific supervision, control, training and/or advisory duties

Board of Directors

Managers

Segm

ents

Segm

entsEmployees are Employees are

divided intodivided intosegments…segments…

...... tthe resulting “score” determines the nature, frequency and specifhe resulting “score” determines the nature, frequency and specificiccontent of the training actions scheduled.content of the training actions scheduled.

INDEPENDENT REVIEWINDEPENDENT REVIEW44

InternalInternalAuditAudit

Legal requirement: In some jurisdictions, AML & CTF proceduresand internal controls must be reviewed by an “external expert”once a year.

Independent reviewof AML &

CTFPolicies,

Rules and Procedure

s

Compliance with Compliance with Policies, Rules Policies, Rules and Proceduresand Procedures

CustomerCustomeradmissionadmission

Internal reporting of Internal reporting of suspicioussuspiciousactivitiesactivities

Analysis of Analysis of alerts generated by thealerts generated by themonitoring system.monitoring system.

ExternalExternalExpertExpert

AML & CTF CULTURE AND CONTROL ENVIRONMENT ACROSS THE WHOLE ORGANIZATION ARE CRUCIAL

LastLast thoughtsthoughts ......

AML & CTF issues are getting more and more

important

Growing costs and controls to reduce risks

The key issue in AML & CTF is KYC (identification, source of fundsand transactional activity)

INCREASING AND STRICTER REGULATIONS MORE SOFISTICATED PRODUCTS

GLOBAL PRESENCE

Risk in businesses more complex

Agosto2005

PREVENTION OF MONEY LAUNDERING AND TERRORISM PREVENTION OF MONEY LAUNDERING AND TERRORISM FINANCING.FINANCING.

BBVABBVA’S RISK MANAGEMENT MODEL’S RISK MANAGEMENT MODEL

April 25April 25thth, 2008, 2008

prevention of money laundering and terrorism financingprevention of money laundering and terrorism...

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