ICC-Commercial Crime Services Financial Investigation Bureau (FIB) _________________________________________________

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ICC-Commercial Crime ServicesFinancial
Investigation Bureau (FIB)_______________________
__________________________

• Creating an International Standard
• of
• Risk Management in Trade
• __________________________________________________
  ________________
• John W. Lavers Assistant Director
• Financial Investigation Bureau

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ICC-Commercial Crime Services

• ICC-Commercial Crime Services
• Current trends in Risk Management
• Case Examples
• Need for an International Operational Standard

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ICC-Commercial Crime Services

• Specialised Division of the ICC
• Not-for Profit Organisation
• UN Consultative/Observer Status
• International Co-operation with INTERPOL
• Global Operations
• Membership-based

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ICC-Commercial Crime Services

• Financial Document Analysis
• Financial Transaction Analysis
• Due Diligence Research and Analysis
• International Financial Crime Investigations
• Anti-money Laundering
• Counter-terrorism Financing
• Financial Risk Assessment Tools
• Seminars, Workshops Training

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Current Trends in Risk Management

• Guidelines - FATF
• Recommendations - Council of Europe
• Voluntary Codes of Practice
• Standards - Basel II
• Principles - Wolfsberg Group on AML
• Initiatives Strategies

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Current Trends in Risk Management

• Directives - European Union (3rd)
• National Legislative Framework
• - Laws
• - Regulations
• - Measures

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Current Trends in Risk Management

• What has been the result?
• - mostly government-led
• - overall application disjointed
• - continuing national limitations
• - increased confusion on implementation
• - go it alone attitude by some
• - out-right refusal by others to comply

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Current Trends in Risk Management

• Direct Challenges to RM Implementation
• Different Interpretation of Words
• - associated PEP
• - red flag lists
• - suspicious matter / activity
• - method / tools of collection /
  verification of information

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Current Trends in Risk Management

• Differences in approaching RM
• a) Prescriptive-based RMS
• or
• b) Performance-based RMS

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Current Trends in Risk Management

• Differences in Implementation
• - Government Regulations Measures
• - AML Policies (private sector)
• - Standard Operating Procedures

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Case Example 1

• A member bank contacted IMB to request assistance
  with an enquiry pertaining to existence of a
  B/L.
• Checks were conducted and resulted in the
  following

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From One Random Check
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Case Example 2

• Business working together against the bank
• Fraud at both ends of the trade and financial
  transaction (trade-finance fraud)
• Carousel fraud involving the same shipping
  container
• Results are as follows

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UAE Co II
UAE Co I Orig Cont M 30K Canada (2004)
TR Goods
Goods Cntr No
Goods
TR Goods
650k
650k
TR Goods
IRAN Co I
IRAN Co II
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Case Example 3

• FIB received a request from a member in Asia to
  perform a review of a financial contract
  involving over 100 documents.
• Given that there were some minor difficulties
  some of the documents, one document raised some
  concern from a FIB analyst.

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International Standard for RM

• Need to make RM DD/KYC Checks easier
• Need to have these checks done to an operational
  standard acceptable to the parties involved
• Standard needs to be recognised
• Requirement for international exchange of
  information

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Proposal

• a central authority, body or committee
• to set standards for operational effectiveness
• to implement those operational standards
• what we say is what we will do
• this central authority, body or committee perform
  the task without commercial bias
• described as providing a conversion / converter
  service between different RM structures or
  systems

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Benefits

• Common international approach to RM
• Assurance / confidence / trust and creditability
  of a global operational standard
• An organisation has provided for a common
  denominator against the process of RM, DD, KYC
• Avoid regional practices, individual
  interpretations local applications of RM and
• Avoid inconsistency and builds sustainability

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Thank you for your attention.

• John W. Lavers
• Assistant Director
• ICC- Commercial Crime Services
• Financial Investigation Bureau (FIB)
• Telephone [phone]
• E-mail fib_at_icc-ccs.org
• Website www.icc-ccs.org