NoMark 13 | - Freelance Writer
Dec 04, 2015 | #1
AML Questionnaire
Your name:
Your email:
Your phone:
Your location/department:
1. How would you characterize your approach to AML?a. risk based
b. compliance based
c. a balance of risk and compliance based
d. scenario based
e. none of the above
2. Do you generate SARs/STRs?
a. if YES go to question 3
b. if NO go to question 7
3. Which of the following do you take in to consider when generating a SAR/STR? (mark all that apply)
a. customer/client knowledge
b. activity resembles a past activity that was/is known to be suspicious
c. activity resembles an example of suspicious activity
d. I was directed to do so by senior management
e. use of external databases (e.g., World-Check)
f. my professional intuition
g. consultation with a colleague (including an MLRO)
4. Think back on feedback you have received on SARs/STRs you have generated (mark all that apply)
a. no feedback received
b. positive feedback received
c. negative feedback received
d. neutral feedback received
5. Think about what you know about the practices of others you know who generate SARs/STRs. Would you say that...(mark all that apply)
a. my approach is consistent with that of others
b. my approach is inconsistent with that of others, but with good reason
c. my approach is inconsistent with that of others, but I'm not sure why
d. of people I know who generate SARs/STRs, there is little, if any consistency in how they are generated
e. I set the standards for generating SARs/STRs, so there is substantial consistency
f. I follow the guidance of one or more co-workers, so there is substantial consistency, at least with respect to those co-workers
g. I follow a set of standards, and others are supposed to as well, but I don't know how much consistency there is
6. How many SARs/STRs do you generate, or oversee the generation of, per year?
a. 0-10
b. 10-50
c. 50-100
d. >100
7. In conducting your own work, do you distinguish between money laundering and (mark all that apply)...
a. terrorist finance
b. tax evasion (not just income tax, but also customs duties, VAT, etc.)
c. sanctions evasion
d. hawala and other "alternative remittance systems"
Research Approach
The questionnaire will be designed to capture data through both open and closed format questions. There will therefore be a trade-off between open questions that will provide a greater depth of insight and closed questions that will be easier to analyse and compare.
(new text goes here)
(if some of the countries are NON FATF countries, additional decision point questions should be added, as it is not accurate to compare FATF with NON FATF countries).
(note that some of these questions could be expanded into a Likert scale; instead of asking which items from a list are important, the person could be asked to rate each item on the list for its importance on a scale from 1-5; this makes for a longer questionnaire, and there is then a methodological issue to be resolved. If something is rated 1, it is clear that it IS important, 5 means NOT important, but what, if any, "shades of meaning" are attached to values 2-4, and are these "shades of meaning" context sensitive-e.g., do they vary by country, city, or job function?)
The [draft] questionnaire consists of seven questions, in addition to requesting the coordinates of the respondent. These are gathered in order to facilitate checking the character of responses across both types of departments (e.g., loans vs. new accounts) and countries (e.g., The United Kingdom vs. the UAE). It is assumed that all countries surveyed have an AML regime in place that is more or less compliant with the FATF Recommendations, specifically, requiring the generation of a SAR/STR in cases where a transaction is believed to be suspicious. It is also assumed that the countries' FIUs operate in a mode where some measure of feedback is provided on SARs/STRs. The important exception to these assumptions is the United States. In the United States, reporting is also required for cash transactions exceeding US$10,000. In addition, the distributed nature of AML within the U.S. government appears to preclude the systematic evaluation of SARs/STRs and the provision of feedback to issuing institutions, despite the presence of a robust FIU in the form of the Financial Crimes Enforcement Network (Cassara 2006, pp. 221-226).
The value of this questionnaire is diminished if a country has made no pretence of compliance with the FATF Recommendations. It is, however, useful in all cases as a gauge of the baselines in place for AML risk assessment and compliance. Diligent use of the questionnaire's results will, inevitably, serve to focus the application of business process re-engineering on an institution's AML programme.
Question #1 of the questionnaire calibrates the respondent's understanding of AML "best practices." It is one of the few questions with a correct answer, and that answer is (c) (Financial Action Task Force 2011, p. 18).
Question #2 is a decision point; individuals involved in the generation of SARs/STRs have questions to answer that those who not generate them do not have to answer.
Question #3 tests the resources used in SAR/STR generation. A "good" response has more selections than a "poor" response.
Question #4 is particularly applicable in jurisdictions such as the U.K.where every SAR/STR is subject to some form of review. The mere presence of feedback (which can include official action) is not the sole metric of SAR/STR quality, but feedback on SARs/STRs does indicate that they are the type of thing that the the FIU wants to see.
Question #5 is very important; there is no right answer, but, obviously the more consistency, the better. A lack of consistency is almost certainly a clear indication that something is wrong with the institution's ALM training program, and some form of corrective action-ranging from the selection of a new training vendor to the application of business process re-engineering is needed.
Question #6 was designed with a view towards statistics; it might be well to compare activities using # of SARs/STRs generated as a unifying factor. It will also show which functions within an institution generate the most SARs/STRs.
Question #7, like question #1, has a right answer. All three options should be selected. This is because even though terrorist finance, tax evasion, and sanctions evasion are financial crimes, they are not the same as money laundering. Poor answers to this question, as with questions #1 and #5, points to systematic problems in the implementation of the institution's AML regime. Hawala is something of a special case. In jurisdictions such as the US, hawala is viewed as a regulatory problem, many of its practitioners are businesses such as ethnic shops, and are, as such, operating outside the regulatory framework for financial institutions. In jurisdictions such as India, hawala is viewed as a foreign exchange/capital flight problem.
NEW REFERENCES
Cassara, John 2006, Hide And Seek: Intelligence, Law Enforcement and the Stalled War on Terrorist Finance. Potomac Books, Bethesda, MD USA
Financial Action Task Force, 2011, Anti-Money Laundering and Terrorist Finance Measures and Financial Inclusion. OECD, Paris, France.