1. Could you explain the concept of money laundering in simple terms?
Money Laundering refers to converting illegally earned money into legitimate money. So Money Laundering is a way to hide the illegally acquired money.
2. What is the biggest challenge in this sector?
Supervisory pressure is the biggest challenge because of changes in the laws, regulations related to sanctions at international level.
3. How can AML or KYC or KYB benefit from the blockchain technology?
KYC utility system based on block chain could enable the financial and banking sector to regain the ownership of end to end user interaction. This would increase the effectiveness of the system as the regular updation of client data would reduce the requirement for periodic reviews.
4. How can governments stop money laundering? What do you think, can they?
It cannot be stopped; it can be only controlled and managed. It could be managed effectively by adopting measures such as increased collaborations between governments at international level, increased co-operation between regulators and regulated entities, effective use of data & technology and customized trainings to compliance professionals on latest trends and typologies.
5. If everything went to digital money and cash was no longer accepted, how will it change the AML process?
Rapid changes, but the same threat: money laundering is a rapidly evolving challenge. AML and CFT programmes need to keep pace with the plans and tactics of criminals and terrorists. FIs need to have AML systems that are able to change and grow as business does.
6. Why is money laundering bad for the economy? What is the worst effect?
Money laundering erodes financial institutions. Money laundering weakens the financial sector's role in economic growth. Money laundering distorts investment and depresses productivity. Money laundering facilitates corruption and crime at the expense of development. Money laundering can increase the risk of macroeconomic instability. Money laundering also reduces tax revenue as it becomes difficult for the government to collect revenue from related transactions which frequently take place in the underground economy.
The worst effect is: money laundering may lead to the transfer of economic power from the market, the government and the citizens to criminals, abetting therefore crimes and corruption.
7. What are the best books to read to learn about Anti Money Laundering? Have you any recommendation?
Dirty Dealing: The Untold Truth about Global Money Laundering, International Crime and Terrorism- By Peter Lilley
The Laundrymen: Inside the World's Third Largest Business-Jeffrey Robinson
8. What are the risks and benefits of cryptocurrency in the AML?
Risks: Due to limited regulation and the uncertainty of the regulatory environment, cryptocurrency may be attractive to criminals. Cryptocurrencies transacted on the block chain are not intrinsically illegal. Nonetheless, they can be used to facilitate illegal activities such as money laundering, terrorist financing, tax evasion and fraud.
Financial crimes typically involve the need to move money in a concealed manner, and cryptocurrency transactions on the block chain can provide a means to accomplish this goal.
Benefits: With the proper legislation, industry self-governance and government oversight, however, the very features that make block chain vulnerable can be used to develop more sophisticated prevention and detection ability. Specifically, the transactional transparency offered by block chain can be used to conduct sophisticated monitoring by block chain operators and regulators to identify suspicious activity in real time or soon after the transaction. Investigators who follow the money may be afforded international visibility to view the complete paper trail with little restriction or bureaucracy.
9. What’s the craziest money laundering scheme you ever encountered?
The craziest happened is the case of Agriculture Bank of China being fined $215 million by US authorities for falsifying transaction documents involving China and Russia and trying to cover up dollar trades with sanctioned Middle East countries.
10. What is the essential qualification of an anti-money laundering officer?
Rich knowledge of financial and regulatory landscape including International Sanctions Regulations, latest typologies of ML & TF, good data handling & analytical skills. Certifications like CAMS, CGSS could be helpful.
11.How has anti-money laundering changed over the time?
Money laundering schemes get increasingly complex and harder to detect, the enormous and costly task of combating money laundering has become more challenging.
In a world where technology, regulations and sanctions are changing at a pace faster than many financial institutions can keep up with, it is no wonder that banks keep falling foul of the regulators despite investing heavily in their compliance frameworks.
12. How can a transaction be called money laundering?
A transaction could be called money laundering initially by Financial Institutions based on red flags and the suspicion based on the transactional due diligence however and it could be confirmed only by judiciary authorities after investigation.
13. Have you any recommendations to fintech start-ups about the AML process?
Keep evolving at a pace greater than the financial crime.
14. How did you get CAMS certificate, how did you prepare?
Self-Study of ACAMS material and discussing with the peers of industry