What you'll learn

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Understand the key principles of anti-money laundering (AML) and combating the financing of terrorism (CFT).
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Develop and implement AML/CFT policies and procedures tailored to nonbank financial institutions (NBFIs).
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Conduct risk assessments to identify and manage ML and TF risks associated with customers, products, and geographic regions.
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Apply customer due diligence (CDD) measures, including enhanced due diligence for high-risk customers.
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Recognize and report suspicious transactions in compliance with legal and regulatory requirements.
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Understand the roles and responsibilities of directors, senior management, compliance officers, and employees in AML/CFT compliance.
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Maintain proper record-keeping practices to meet regulatory requirements.
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Screen customers against sanctions lists and comply with asset freeze requirements.
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Provide effective AML/CFT training to staff to enhance awareness and compliance.
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Use practical tools and templates, such as risk assessment forms and account opening checklists, to implement AML/CFT measures

Course Curriculum

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21 Lectures

Part A 6 Curriculum Elements

Roles and Responsibilities

Policy Statement

Customer Acceptance Policy

Independent Audit and Review

Risk-Based Approach to Managing Risk

Awareness Raising and Training of the Staff

Part B 5 Curriculum Elements
Glossary 1 Curriculum Elements
Appendixes 9 Curriculum Elements

Requirements

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Basic understanding of financial systems and the role of nonbank financial institutions (NBFIs).
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Familiarity with the concepts of money laundering and terrorist financing.
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Knowledge of regulatory frameworks and compliance requirements in the financial sector.
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Awareness of international standards set by organizations like the Financial Action Task Force (FATF).
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Experience in risk management or compliance within a financial institution is beneficial but not mandatory.

Description

The Handbook on Anti-Money Laundering and Combating the Financing of Terrorism for Nonbank Financial Institutions, published by the Asian Development Bank (ADB), serves as a detailed guide for nonbank financial institutions (NBFIs) to manage risks associated with money laundering (ML) and terrorist financing (TF). The handbook is designed to help NBFIs comply with international standards, particularly those set by the Financial Action Task Force (FATF), and to develop robust internal controls to prevent their services from being exploited for illicit activities. The book is divided into two main parts: Policies and Standards and Procedures, each addressing critical aspects of AML/CFT compliance.

Part A: Policies and Standards
This section outlines the foundational policies and standards that NBFIs must adopt to mitigate ML and TF risks. It emphasizes the importance of a risk-based approach, which involves identifying, assessing, and managing risks associated with customers, products, services, delivery channels, and geographic regions. The handbook stresses that NBFIs must develop a comprehensive risk management framework tailored to their specific operations. Key policies include the Customer Acceptance Policy, which defines the types of customers and transactions that are acceptable, and the Independent Audit and Review process, which ensures that AML/CFT policies are effectively implemented and regularly reviewed.

The handbook also highlights the roles and responsibilities of various stakeholders within an NBFI, including directors, senior management, compliance officers, and employees. Senior management is tasked with ensuring that the institution’s AML/CFT policies are aligned with legal requirements and best practices. The compliance officer plays a critical role in overseeing the implementation of these policies, conducting risk assessments, and reporting suspicious activities to the financial intelligence unit (FIU). Employees, on the other hand, are responsible for adhering to AML/CFT procedures, identifying suspicious transactions, and reporting them to the compliance officer.

Part B: Procedures
The second part of the handbook delves into the practical procedures that NBFIs must implement to comply with AML/CFT requirements. A significant portion of this section is dedicated to Customer Due Diligence (CDD), which involves identifying and verifying the identity of customers, understanding the nature of their business, and monitoring their transactions. The handbook provides detailed guidance on the account opening process, including the documentation required for individual and corporate customers, and the need for enhanced due diligence for high-risk customers, such as politically exposed persons (PEPs).

The handbook also covers suspicious transaction reporting, emphasizing the importance of recognizing and reporting activities that may be linked to ML or TF. It provides examples of suspicious transactions, such as unusual cash deposits, inconsistent transaction patterns, and transactions involving high-risk jurisdictions. The compliance officer is responsible for investigating these reports and, if necessary, submitting them to the FIU. Additionally, the handbook discusses record-keeping requirements, specifying the types of records that must be maintained and the duration for which they should be retained.

Risk-Based Approach
A central theme throughout the handbook is the risk-based approach to managing ML and TF risks. This approach requires NBFIs to assess the level of risk associated with different customers, products, and geographic regions and to implement controls proportionate to the identified risks. For example, high-risk customers, such as PEPs or those from jurisdictions with weak AML/CFT frameworks, should be subject to enhanced due diligence and ongoing monitoring. The handbook provides a risk assessment form (included in the appendices) to help NBFIs categorize customers and transactions based on their risk level.

Training and Awareness
The handbook underscores the importance of staff training and awareness in preventing ML and TF. It recommends that NBFIs provide regular training to employees on AML/CFT policies, procedures, and the identification of suspicious activities. Training should be tailored to the specific roles of employees, with a focus on those who handle customer transactions. The handbook also suggests that NBFIs maintain records of training sessions, including the topics covered and the employees who attended.

Sanctions and Prohibitions
Another critical aspect covered in the handbook is the need for NBFIs to comply with sanctions and asset freeze requirements. NBFIs must screen customers against lists of individuals and entities designated as terrorists or involved in terrorist financing, as issued by the United Nations Security Council and other relevant authorities. The compliance officer is responsible for ensuring that these checks are conducted and that any matches are reported to the appropriate authorities.

Appendices and Practical Tools
The handbook includes several appendices that provide practical tools and templates for NBFIs, such as risk assessment forms, account opening checklists, and examples of suspicious transactions. These resources are designed to assist NBFIs in implementing the policies and procedures outlined in the handbook. Additionally, the handbook provides web references to external resources, including guidance from the FATF, the Australian Transaction Reports and Analysis Centre (AUSTRAC), and other organizations, which can further support NBFIs in developing their AML/CFT frameworks.

Conclusion
In conclusion, the Handbook on Anti-Money Laundering and Combating the Financing of Terrorism for Nonbank Financial Institutions is an essential resource for NBFIs seeking to comply with AML/CFT requirements and protect their institutions from being used for illicit activities. By following the guidance provided in the handbook, NBFIs can develop and implement effective AML/CFT policies and procedures, conduct thorough risk assessments, and ensure that their staff are well-trained to identify and report suspicious activities. The handbook not only helps NBFIs meet regulatory requirements but also contributes to the global effort to combat money laundering and terrorist financing.

Instructors

SP

Shivam Pandey
Digital Marketing

(3.67)

  156 Courses

  25 Students

  3 Reviews