The Articles
Have a glimpse...
Compliance Risk Management
Compliance, be it Regulatory and/or Financial Crimes management, looks fundamentally at risk management. This view is absolutely clear, where we are, now, standing. In Year 2002, when this article first took roots, the author proposed a structured way of managing compliance risks. The environment has changed and the techniques applied are more much sophisticated. Some things change, some things don't. Fundamentals do not alter.
Anti-Money Laundering
When the concept was prepared for this article in early 2003, the general risk management framework for managing AML risks was still in its infancy stage. The idea behind this article was to apply operational risk management framework and techniques in the analysis of AML risk factors. Nearly 15 years have passed (as of date of website initial inauguration in Sep 2018), what have really changed? Does this article remain relevant after all?
Trade-Based Money Laundering
While the industry uses this term, Trade-based Money Laundering (TBML), I prefer this terminology, "Trade Financial Crimes" (TFC), as it is more encompassing of the myriad of crimes that manifest under the trade financing umbrella. I have a passion in trade finance-related crimes and started to explore this, both academically and professionally since Year 1999. However, the first case that sparked-off my interest was a potential U-Turn shipment that took place in Year 2000. I did not have the "full answers" to one unresolved query and it took me another 10 years to find that "missing link" when I was researching on customs-related practices. In the last 2 years, this thought kept coming back to me, "the more it appeared that I know, the less, I feel that I really know." One of my wish is to impart the TFC-related know-how to the next batch of compliance officers before, if, I pursue an early retirement (who knows)?
Correspondent Banking Risk Analysis
Correspondent Banking (CB) financial crime risk analysis is generally not well-understood. In addition to the intricacies of CB surveillance, the burden of financial institutional due diligence has inadvertently led Banks to embark on de-risking. Derisking does mitigate certain risks but does not insulate the Bank from CB-related financial crime risks.
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CB risks manifest broadly speaking, as follows: -
Jurisdictional nuances. For instance, certain countries have different views and "risk tolerance" of tax evasion. What is unacceptable to a downstream Respondent Bank might be "acceptable" to the upstream Originating Bank, as "certain tax non-compliant behaviours are generally acceptable if they are not too obvious."
The Correspondent Bank's risk appetite due diligence and monitoring.
Payments transparency compliance.
Frauds
Frauds, as old age as they were and as they are; remain prevalent in today's world. While the medical sector has seen success in eradicating certain illness, frauds remain a villain that will not be eliminated. How does a financial institution risk-manage frauds, then? Or do we need a bunch of Superheroes out there, quoting Bonnie Tyler's, "Holding Out For A Hero".
Tax Crimes
Tax crimes is an intriguing area of study, both academic and practical. From a practical application perspective, one of the greatest challenge is the area of Tax Avoidance and when the anti tax avoidance provisions are being invoked. Whilst the industry is familiar with tax crimes as they manifest in the Private Banking sector and the offshoring income by corporate entities, a greater ambiguity lies in the practice of Transfer Pricing and Inter-company Loans. This article, "50 Shades of Grey", offers an elementary view of tax-related issues and examples from a Compliance perspective. This is the tip of the iceberg only.
Conduct Risks
Regulatory compliance risks permeate the organisation. Regulatory risks are always present, the "issues" are (a) whether the Bank recognizes the how the risks manifest and the magnitude to which the institution is exposed to and (b) when the Bank acknowledges that the risks present real exposure or are they purely academic in nature. This article explores the element of Conduct Risks in the trade finance space. Sometime in August 2017, during a casual conversation with the Chief Executive Officer of a certain foreign bank in Singapore, his words (paraphrased) were, "I saw your article and the issues were exactly what I had been thinking about in the last couple of months especially against the MiFID's regime."
