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Money-laundering: The risks near and far

EBRD is teaching bankers how to avoid getting into trouble over money-transfer pitfalls that turn into money-laundering. Photo: EBRD
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EBRD is teaching bankers how to avoid getting into trouble over money-transfer pitfalls that turn into money-laundering. Photo: EBRD

A recent international seminar in Tunisia on money laundering focused attention on this key issue of financial malfeasance and the risks that persist near and far for professional individuals, business institutions and governments at large.

The organiser of the event, the London-based European Bank for Reconstruction and Development, has been campaigning against money laundering as only a governance-savvy and responsible bank can do, ie by telling financiers how to go about beating the problem and avoiding the risk of bone-crunching fines and worse outcomes, including imprisonment.

Money laundering can be an expensive business for banks as regulators in recent years have been clamping down, something they should have done years earlier but somehow didn’t, and in the bargain have been pocketing the windfall fines that come with the regulatory enforcement.

In 2012 HSBC was one of the recipients of a record hefty fine in the United States, about $1.9 billion, and although it apologised for “past mistakes” last year the group came under the radar again for alleged money laundering and fraud involving its Swiss private banking arm. Other high street and private banks in Europe, the Middle East and Africa haven’t been spared in the regulators’ newly acquired enthusiasm, aided to some extent by advanced technologies.

But regulators still stop short of using one deterrent that can make a long-term difference — jail for those found guilty. Some regulators indeed don’t even possess the powers that go beyond extracting fines, which usually end up as tiny specks on the balance sheets that hurt shareholders more than errant bankers and other professionals held accountable in anti-money laundering measures. Added to that glaring flaw in the enforcement procedures, a shortcoming so astonishing as to beggar belief, are the familiar-to-usual banes of inbred corruption, cronyism, lack of political accountability and the vast and intractable old boys’ networks that transcend the rule of law.

The EBRD-aided seminar lasted three days (20-22 January 2015) and was held under the aegis of l’Association Professionnelle Tunisienne des Banques et des Etablissements Financiers (APTBEF).

Nearly 50 representatives from the Central Bank of Tunisia, local banks and the Tunisian Financial Analysis Committee (CTAF) participated in the seminar.

The seminar’s key objective was to help financial institutions adapt to changing risks by improving the efficiency of their policies and procedures for fighting money laundering, and by implementing related measures. Initiatives of this type are an integral part of EBRD activities and support the bank’s transition mandate, EBRD says.

During the seminar, international experts focused on raising awareness among participants from local banks about new risks related to money laundering and the financing of terrorism, the difficulties engendered by international sanctions, and the identification of funds linked to corruption, EBRD said. However, analysts have told The Middle East in Europe the survival and indeed the financial success of ISIL and other terror organisations indicates that whatever is being done to combat money laundering isn’t working in any significant manner.

Marie-Alexandra Veilleux-Laborie, the EBRD Head of Office in Tunisia, said, according to an EBRD news release, “This seminar is very important for the transparency and performance of the financial sector in Tunisia. It is also in line with our commitment to develop and restructure the country’s financial sector. We have already invested over €210 million in more than 20 projects across various projects in Tunisia.”

The workshop was focused on current AML and CFT challenges and international sanctions provisions, recognising that sanctions are increasingly imposed not only on named entities but also on areas of economic activity within a designated region. The event emphasised practical and proportionate responses to money laundering risks.

The main targeted outcomes were enhanced knowledge, understanding and cooperation among stakeholders. The event explained the new focus of AML regulation and the obligations that are placed on financial institutions. It also explored how organisations can implement effective AML and CFT measures despite resource constraints.

Since 2002 the EBRD has organised AML training in more than 20 countries. These events have been attended by more than 800 bankers from approximately 500 banks and financial institutions.

Author: Editor

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