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<h3>𝐖𝐞 𝐡𝐚𝐯𝐞 𝐜𝐫𝐞𝐚𝐭𝐞𝐝 𝐚 𝐟𝐫𝐞𝐞 𝐠𝐮𝐢𝐝𝐞 𝐟𝐨𝐫 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐢𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬. 𝐈𝐟 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐞𝐝, 𝐫𝐞𝐚𝐜𝐡 𝐨𝐮𝐭 𝐭𝐨 𝐫𝐞𝐜𝐞𝐢𝐯𝐞 𝐟𝐫𝐞𝐞 𝐚𝐜𝐜𝐞𝐬𝐬.&nbsp; &nbsp;</h3><figure id="figure-fadr5en3tm2sx2gme"><img id="fadr5en3tm2sx2gme" src="https://cdn.durable.co/blocks/168LbP9yvQLSUgiIgQKWxolcWPVKdm1eP7NAsNKxYCevH2dv842RvBU03uNr8pJd.png" alt="Compliance to Standards, Regulations, and Requirements to pass audit and manage quality control. Concept about conformity with manager or auditor pressing buttons with icons." title="Compliance to Standards, Regulations, and Requirements to pass audit and manage quality control. Concept about conformity with manager or auditor pressing buttons with icons." class="object-cover bg-gray-100 rounded-sm md:rounded-md lg:rounded-lg" style="aspect-ratio: 1/1; object-position: 50% undefined%;" data-corners="small" data-aspect="1:1" data-caption="" data-positionX="50%" data-positionY="undefined%" data-fullWidth="false"/></figure> 𝐇𝐞𝐫𝐞 𝐚𝐫𝐞 𝐬𝐨𝐦𝐞 𝐡𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬: 𝟏. 𝐃𝐲𝐧𝐚𝐦𝐢𝐜 𝐑𝐢𝐬𝐤 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭: &nbsp;Institutions must regularly conduct business-wide and individual customer risk assessments, focusing on financial crime and other compliance risks, whilst dynamically adjusting to emerging threats. 𝟐. 𝐓𝐚𝐢𝐥𝐨𝐫𝐞𝐝 𝐂𝐨𝐧𝐭𝐫𝐨𝐥𝐬: AML/CTF policies and procedures should be proportionate to size, complexity, and risk profile of the organisation, tailoring effective controls to mitigate identified risks. 𝟑. 𝐊𝐞𝐲 𝐑𝐢𝐬𝐤 𝐅𝐚𝐜𝐭𝐨𝐫𝐬: Risk assessment must account for customer risk (e.g. high-risk profiles), geographical risk (e.g. high-risk jurisdictions), product/service risks (e.g. virtual currencies), and delivery channel risks (e.g. non-face-to-face interactions). 𝟒. 𝐒𝐨𝐮𝐫𝐜𝐞𝐬 𝐟𝐨𝐫 𝐑𝐢𝐬𝐤 𝐈𝐝𝐞𝐧𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧: Use credible sources such as EU’s, national, and FATF’s risk assessments, relevant Financial Crime guidelines, and applicable industry reports to inform risk assessments and decisions. Data-driven and dynamic internal risk identification and monitoring is crucial.&nbsp; 𝟓. 𝐎𝐧𝐠𝐨𝐢𝐧𝐠 𝐌𝐨𝐧𝐢𝐭𝐨𝐫𝐢𝐧𝐠 𝐚𝐧𝐝 𝐃𝐮𝐞 𝐃𝐢𝐥𝐢𝐠𝐞𝐧𝐜𝐞: Institutions must continuously screen, monitor, and assess customer relationships, apply Enhanced Due Diligence for high-risk cases and Simplified Due Diligence for low-risk profiles. 𝟔. 𝐑𝐢𝐬𝐤 𝐀𝐩𝐩𝐞𝐭𝐢𝐭𝐞 𝐚𝐧𝐝 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐂𝐮𝐥𝐭𝐮𝐫𝐞: Establish a clear Risk Appetite Statement (RAS) which is endorsed by senior management and ensure a compliance-focused organisational culture, with regular updates and control testing. TIME 2 COMPLY is a consulting firm helping financial institutions manage their financial crime risks and staying compliant. We have a successful track record implementing and improving SIRA and Financial Crime Risk Assessments. We can help you create a data-driven and proactive process to refocus your efforts on the actual risks.&nbsp; 👉 Reach out if you would like to hear more.&nbsp; &nbsp;

Risk-Based Approach in AML/CTF

<h3>𝗕𝗲𝗻𝗲𝗳𝗶𝗰𝗶𝗮𝗹 𝗢𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽 (𝗕𝗢) pertains to ownership of 25% (or &gt;) of the shares/voting rights/other ownership interest of a corporate entity.</h3>Ownership interest refers to both control rights &amp; significant rights in terms of the yielded benefit. In case of indirect ownership, BOs are identified by multiplying the shares/voting rights/other ownership interests within the ownership chain and adding them together.&nbsp;𝗨𝗕𝗢 𝗶𝘀 𝗱𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗲𝗱 𝗯𝗮𝘀𝗲𝗱 𝗼𝗻:&nbsp; 1. The existence of direct or indirect control / ownership interest; or 2. The existence of control via other means.&nbsp; &nbsp; 𝗖𝗲𝗻𝘁𝗿𝗮𝗹 𝗥𝗲𝗴𝗶𝘀𝘁𝗲𝗿𝘀: the obliged entities should use central registers to verify the data they had obtained on customers. If this process reveals discrepancies, the obliged entity should report such inconsistencies to the central register. As not all the registers are already fully accessible, consult the EU-country specific status and transitional (reporting) requirements.&nbsp; &nbsp; 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗼𝗳 𝗨𝗕𝗢 𝗗𝗮𝘁𝗮: the data obliged entities are required to obtain to verify the identity of BOs must be “adequate, accurate, and up to date". The requirements differ according to the type of BO but should include the following*:&nbsp;↪ all names and surnames, place and DOB, residential address, country of residence, nationality, number of the identity document, &amp; if applicable, assigned unique personal identification number &amp; general description of the source of such number;&nbsp; ↪ the nature, extent, and start date of the beneficial interest held.&nbsp; *𝙉𝙤𝙩 𝙚𝙭𝙝𝙖𝙪𝙨𝙩𝙞𝙫𝙚.&nbsp; &nbsp; 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝗢𝗯𝗹𝗶𝗴𝗮𝘁𝗶𝗼𝗻𝘀: certain types of reporting obligations of BO apply to non-EU entities who do business in the EU, purchase real estate in the EU, purchase motor vehicles/watercraft/aircraft over certain thresholds, &amp;/or are awarded certain types of public contracts.&nbsp; &nbsp; 𝗣𝘀𝗲𝘂𝗱𝗼 𝗨𝗕𝗢𝘀: where a UBO cannot be identified, Senior Managing Officials should be identified and verified as BOs.&nbsp;👉𝐂𝐨𝐧𝐭𝐚𝐜𝐭 𝐮𝐬 𝐟𝐨𝐫 𝐚 𝐟𝐫𝐞𝐞 𝐜𝐨𝐧𝐬𝐮𝐥𝐭𝐚𝐭𝐢𝐨𝐧&nbsp; Discover how TIME2COMPLY can help your company comply with the EU UBO requirements.&nbsp;#Time2Comply #UBO #AMLR #FinCrime#AML#CFT #FATF #Compliance

EU AML Regulation UBO requirements

IT consultant being setup Virtual Document Management System (DMS) with laptop computer in office or wok from home.Software for archiving corporate files concept.

<figure id="figure-r1h2zz2w1cm2s1h2yd" class=""><img id="r1h2zz2w1cm2s1h2yd" src="https://cdn.durable.co/covers/14lEQ217x4zOox6kqq9M7zvo3HNZ8OEPQG6VdUSKj7m3sQBMhaEWBUEtyarQMfwA.png" alt="people sitting at the table" title="people sitting at the table" class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: undefined undefined;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://cdn.durable.co/covers/14lEQ217x4zOox6kqq9M7zvo3HNZ8OEPQG6VdUSKj7m3sQBMhaEWBUEtyarQMfwA.png" data-mce-style="aspect-ratio: 16/9; object-position: undefined undefined;"></figure>IntroductionCertain types of economically motivated crime have soared globally due to the rise in emerging technologies. &nbsp;According to INTERPOL, “scammers stole over $1 trillion from victims around the world” in 2023 alone; though around $2 to $3 trillion (USD) worth of illicit funds are laundered through the global financial system annually, only a fraction, currently estimated at 3%, of criminal assets being intercepted and confiscated.In what follows, we will demystify the common types of financial crimes and the key terms. What is FinCrime?Financial crime, widely known under the neologism FinCrime, is an umbrella term which encompasses a number of different offences. According to Europol (European Union Agency for Law Enforcement Cooperation) financial crime “refers to illegal acts committed by an individual or a group of individuals to obtain a financial or professional advantage.” Though terms ‘financial crime’ and ‘economic crime’ are used interchangeably, we should note that ‘economic crime’ is technically a wider topic which encompasses all types of financial crimes, and which is also tightly linked to market crime.Though there are numerous offences which belong to the FinCrime group, the following six are commonly considered to be the main types: 1. Money laundering (ML)2. Terrorist financing (TF)3. Bribery and corruption4. Sanctions evasion5. Tax crimes6. Fraud7. Other types of financial crimes&nbsp; 1. What is ML?Money laundering (ML) is the process of concealing or disguising the proceeds of crime (i.e. ‘dirty money’) so that the proceeds appear as though they have legitimate origin.The UN Vienna 1988 Convention Article 3.1 describes money laundering as: “the conversion or transfer of property, knowing that such property is derived from any offense(s), for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in such offense(s) to evade the legal consequences of his actions.”Anti-money laundering (AML) thus encompasses of a wide range of procedures, laws, policies, and regulations designed to prevent, detect, and report attempts to disguise the proceeds of crime with a view to prohibiting the illicit funds from entering an economy and, consequently, the global financial system. 2. What is TF?Terrorism financing (TF) involves the provision and processing of funds with the intention that they should be used to support or carry out acts of terrorism. &nbsp;Counter-terrorist financing (CTF) thus refers to the set of strategies, regulations, and actions aimed at preventing, disrupting, and/or restricting the flow of funds to terrorist organisations.The UN Resolution 1566 (2004), which marked a significant step towards codifying a definition of terrorism under international law, provides the most complete international definition of terrorism:“[...] criminal acts, including [those] against civilians, committed with the intent to cause death or serious bodily injury, or taking of hostages, with the purpose to provoke a state of terror in the general public or in a group of persons or particular persons, intimidate a population or compel a government or an international organization to do or to abstain from doing any act, and all other acts which constitute offences within the scope of and as defined in the international conventions and protocols relating to terrorism, are under no circumstances justifiable by considerations of a political, philosophical, ideological, racial, ethnic, religious or other similar nature [...].” 3. What are bribery and corruption?Bribery is usually described as the most common form of corruption. Though there are a number of international instruments and domestic laws which conceptualise bribery, it is most often defined as offering, giving, receiving, or soliciting of a benefit in order to induce improper conduct. A bribe can take multiple forms and includes tangible and intangible means – in other words, it could be in the form of e.g. money, a promise of incentives, sexual or other favours.Bribery is defined in the Article 1 of the Organisation for Economic Co-operation and Development’s (OECD’s) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions as:“any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.”Corruption thus occurs as soon as one pays or receives a bribe. In fact, if/when bribery occurs, it often leads to other forms of corruption.In a nutshell, corruption refers to dishonest, unlawful, or fraudulent conduct intended to secure a benefit for oneself or another. Given the broad range of crimes that fall under the unifying term ‘corruption,’ it is no surprise that The United Nations Convention against Corruption (UNCAC) does not offer a definition of the term but rather encourages States to criminalise such offences in their own respective jurisdictions.Article 8 of the UN Convention Against Transnational Organized Crime describes corruption as:“The promise, offering or &nbsp;giving &nbsp;to &nbsp;a public &nbsp;official, &nbsp;directly &nbsp;or &nbsp;indirectly, of an undue advantage, for the official himself or herself or another person or entity, in &nbsp;order &nbsp;that &nbsp;the &nbsp;official &nbsp;act &nbsp;or &nbsp;refrain &nbsp;from &nbsp;acting &nbsp;in &nbsp;the &nbsp;exercise &nbsp;of &nbsp;his &nbsp;or &nbsp;her official duties; (b) The &nbsp;solicitation &nbsp;or &nbsp;acceptance &nbsp;by &nbsp;a &nbsp;public &nbsp;official, &nbsp;directly &nbsp;or &nbsp;indirectly, of an undue advantage, for the official himself or herself or another person or entity, in &nbsp;order &nbsp;that &nbsp;the &nbsp;official &nbsp;act &nbsp;or &nbsp;refrain &nbsp;from &nbsp;acting &nbsp;in &nbsp;the &nbsp;exercise &nbsp;of &nbsp;his &nbsp;or &nbsp;her official duties.” 4. What is sanctions evasion?&nbsp;Sanctions are punitive or restrictive measures used by countries aimed at stopping another country from acting aggressively or from breaking international law. Sanctions evasion, therefore, refers to the deliberate and illegal act of avoidance or circumvention of sanctions whilst engaging in prohibited activity and avoiding detection.Under Article 41 of the UN Charter, Chapter VII, sanctions are described as:“The Security Council may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations.” 5. What are tax crimes?There is no unified definition of ‘tax crimes’ as both the EU and the UN leave it to their respective Member States to create their own definitions within their domestic laws. In general, ‘tax crimes’ refer to the intentional conduct of breaching tax laws, rules, and/or regulations of a certain country which are prosecutable under the criminal laws of that country. Given that each country thus has its own definition of the term and that, on the global level, we would be talking about incompatible legal frameworks, the OECD purposefully offers a broad definition of ‘tax crimes’:&nbsp;“intentional conduct that violates a tax law and can be investigated, prosecuted andsentenced under criminal procedures within the criminal justice system. [...] It is intended to cover the violation of both income tax law obligations, as well as indirect tax obligations (such as VAT or GST).”The much-anticipated United Nations Convention on International Tax Cooperation (UNFCITC) would arguably dramatically change the global legal tax framework but it is not expected to be finalised before 2027. 6. What is fraud?Fraud refers to any act, knowing misrepresentation of information, or intentional withholding of information to another in order to obtain an undue benefit or advantage which would not have been obtained had the fraudulent behaviour not taken place. Much like in the case of ‘tax crimes’, however, there is no common, unifying definition of ‘fraud’. In June 2024, a paper on “Organized fraud” produced by a Working Group of Government Experts at the Conference of the Parties to the United Nations Convention against Transnational Organized Crime examined legal definitions of ‘fraud’ in 26 countries (in 7 different regions). The Working Group found that the definition varies greatly among the criminal laws of the relevant countries as it is defined in disparate ways and to varying degrees of specificity. The common core elements, the paper found, are:“the use of deception to gain an unjust advantage or benefit, causing a detriment to another person or organization.” 7. Other types of financial crimesThe definition of FinCrime is wide and ever-expanding concept. Among other, it also includes Insider Trading, Embezzlement, CyberCrime, Identity Theft, Forgery and Counterfeiting. Many types of crimes can be overlapping. Such as, most types of the crimes explained would be typically qualified as predicate offences (underlying criminal acts) for money laundering. ConclusionFinCrime presents a significant and growing threat to global economies, driven by emerging technologies and increasingly sophisticated criminal tactics. From money laundering and terrorist financing to bribery, sanctions evasion, tax crimes, and fraud, each form of FinCrime poses unique challenges to businesses, governments, and financial institutions. Understanding these crimes is crucial for organisations looking to implement effective compliance programs and safeguard their assets.As the landscape of financial crime evolves, staying informed and proactive is key to preventing illicit activities from infiltrating legitimate systems. For businesses, this means implementing robust anti-financial crime measures and staying compliant with ever-changing regulations.👉𝐂𝐨𝐧𝐭𝐚𝐜𝐭 𝐮𝐬 𝐟𝐨𝐫 𝐚 𝐟𝐫𝐞𝐞 𝐜𝐨𝐧𝐬𝐮𝐥𝐭𝐚𝐭𝐢𝐨𝐧Discover how TIME 2 COMPLY can help your company to fight Financial Crime and be inspection-proof. #FinCrime #FinancialCrime #AML #CFT #Compliance #FraudPrevention #BriberyAndCorruption#SanctionsEvasion #TaxCrimes #Time2Comply

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Risk-Based Approach in AML/CTF

EU AML Regulation UBO requirements

Financial Crime: Types of Crimes Explained