Regulatory Alerts2024-03-31 | CBE5.14CBE Regulation Book 5.14 - Supervisory Controls To Combat Money Laundering And Terrorist Financing
In summary, the guidance provided by the Financial Action Task Force (FATF) on identifying the characteristics of money launderers in sectors where they are most likely to operate involves several key factors. These include: 1. Identifying individuals or groups who may have access to large sums of money and a motive for money laundering, such as criminals, corrupt officials, terrorists, or organized crime groups. 2. Understanding the methods used by these individuals or groups engage in illicit activities, which are often linked to money laundering. 3. Recognizing the different stages of money laundering: a) The placement stage, where the launderer introduces large amounts of cash into the economy. b) The conversion stage, where the launderer transforms the illicit funds into another form (such as changing dirty currency to clean new one). c) The integration stage, where the launderer incorporates the laundered money into the legitimate economic system. 4. Identifying suspicious activities such as unexplained wealth, frequent large transactions, and maintaining multiple bank accounts for no apparent reason. 5. Developing an understanding of the various methods by which criminals and terrorist organizations finance their activities. This includes recognizing how they may attempt to exploit vulnerabilities within a banking system. 6. Recognizing the importance of international cooperation in combating money laundering, by sharing information and experiences between different countries and financial institutions.