System of independent assessment of qualifications in the field of AML/CFT Godina Elena Head of the Center for Assessment of Qualifications in the field of AML/CFT November 2018

What is an independent qualification assessment (NQA)? 238-FZ of 07/03/2016 “On Independent Qualification Assessment” determines that: Independent qualification assessment is a procedure for confirming qualification compliance with the provisions of a professional standard or qualification requirements established by regulatory enactments The procedure is carried out by the centers for qualification assessments, which are given authority by the Vocational Qualifications Councils

Mechanism for independent assessment of qualifications Verification of compliance with the requirements of the standard: experience, education The exam results are certified by the examination board. The document is valid for 3 years. Applicant or Qualifications Assessment Center Professional Exam Certificate Employer

Independent qualification assessment in the system of personnel training and assessment - target model 2019/2020 All training programs must pass the accreditation procedure (compliance with professional standards) Budget and target places are distributed according to the results of accreditation. Final examinations are supplemented / replaced by independent qualification assessment. Employers who hire certified professionals have priority in tenders, public procurement The professional standard is regularly updated in accordance with the development strategy of the economy and separate industries.

03 01 02 06 04 05 Steps to create a system Creation of the Commission Accreditation of qualifications independent assessment 01 Council selection 02 Branch Councils are created by the National Council on Qualifications under the President of the Russian Federation The Commission is a working body of the Council that makes decisions on qualifications in a specific area. The Council is accredited by legal entities for the right to conduct professional exams. Opening of Examination Centers Network 04 Development of Profstandard and qualifications list 05 Development of assessment tools 06 Assessment kits are developed for each qualification. Profstandart defines a list of qualifications for which you can pass the exam and the requirements for education / experience Opportunity to pass the exam in each region of the Russian Federation

Implementing Internal Control Rules for AML/CFT Steps to create a system: professional standard The Professional Standard " Specialist in Financial Monitoring" was approved in 2015 and developed by the ITMCFM (International Training and Methodological Center for Financial Monitoring) List of qualifications: AML/CFT specialist in organization Financial Investigator of AML/CFT unit Head of AML/CFT unit in organization Implementing Internal Control Rules for AML/CFT Level 6 Conducting financial investigations for AML/CFT in the organization Level 7 Organization of financial monitoring for AML/CFT in the organization Level 8

Steps to create a system: professional standard The minimum standard level is 6, i.e. the professional exam can be passed only by those specialists who have an undergraduate degree of education and at least six months of work experience. It: – Excludes specialists with secondary education from the labor market in the field of AML/CFT – Contradicts the requirement of the Central Bank, allowing secondary education for specialists of small enterprises – Does not allow university graduates to pass the professional exam

Steps to create a system: professional standard 3 qualifications allow to take exam only by three different sets of assessment tools, i.e. questions and objectives of the exam for professionals will be the same regardless of industry or supervisory authority. It: – Reduces the possible range of exam questions and tasks to a minimum – Does not create a comprehensive assessment tool on the market, since does not take into account industry specifics – Does not allow supervisors or business communities to modernize the system without affecting the interests of the entire labor market in the area of AML/CFT

Organization of financial monitoring for the purpose of AML/CFT Steps to create a system: professional standard Implementing internal control rules for the purpose of AML/CFT in the organization Nivel 6 Organization of internal control for the purpose of AML/FT/FPWMD in the organization Nivel 7 Conducting financial investigations for the purpose of AML/CFT in the organization Nivel 7 Organization of financial monitoring for the purpose of AML/CFT Nivel 8

+ additions according to Council recommendations Steps to create a system: professional standard Implementing internal control for the purpose of AML/CFT in the organization Nivel 5 Implementing internal control for the purpose of AML/CFT in the organization: credit, non-credit and non-financial organizations + additions according to Council recommendations Nivel 5 Organization of internal control for the purpose of AML/CFT/FROM in the organization: credit, non-credit and non-financial organizations Nivel 6 Conducting financial investigations for the purpose of AML/CFT in the organization Nivel 7 Organization of financial monitoring for the purpose of AML/CFT: credit, non-credit and non-financial organizations Nivel 8

Steps to create a system: professional standard Updated Profstandart:  Supplemented by level 5 of qualifications - secondary vocational education  The labor functions of each level are divided into 3 categories: financial credit organization, financial non- credit organization, non-financial organization  Adjustments are made in accordance with national policy in the field of employment of people with disabilities, foreign citizens, digital economy, etc.

Steps to create a system: professional standard Updated list of qualifications:  It is divided into 3 categories for qualification of a specialist and a manager: financial credit organization, financial non-credit organization, non-financial organization  Allows to conduct an exam for graduates and specialists with secondary vocational education  Takes into account the specifics of the industry, which allows to create separate assessment tools  Assessment tools should be developed according to the updated list.

Steps to create a system: examination centers Qualifications - total 9 qualifications At the request of the Council, each set must include at least 1,000 questions and 500 practical tasks / cases Assessment tools require validation, i.e. industry verifications for compliance with expert requirements: unambiguous interpretation, exhaustive conditions, etc.

Steps to create a system: assessment tools • A single assessment center may have an infinite number of Examination Centers. • The terms of cooperation are individual and not regulated by the Council additionally • The examination center is the material basis for the examination: calculations, processing of exam applications / results, employment contracts with examiners are the exclusive tasks of the Center for Qualification Assessment The most transparent and safe schemes for the development of AML/CFT Examination Centers: – Regional offices of the RFM – Universities - members of the Network Institute

03 01 02 06 04 05 System startup Update of the regulatory framework Target Instructions transformation Shifting date Qualification requirements are based on professional standard Admission to the profession Determination of conditions under which the current specialist may not undergo a qualification assessment Determining Compliance 06 Educational programs market transformation 04 Conditions for shifting to the new system 05 Definition of the procedure for confirming the applicant's compliance with the qualification requirements Definition of the procedure for confirming the applicant's compliance with the qualification requirements Only high-quality educational programs and training from bona fide providers

System startup: regulatory framework The transition to the new system requires a change in the regulations defining the requirements for the qualifications of specialists in the field of AML/CFT, for example, Order No. 203 of August 3, 2010, as well as similar documents of the Central Bank. Reason for changing the documents is defined by Art. 11 FZ-238 on the “Independent Qualification Assessment”: “In the event that federal laws and other regulatory legal acts of the Russian Federation establish a different procedure for assessing the qualifications of workers or persons applying for a certain type of labor activity than provided for by this Federal Law (except as provided for in paragraph 3 of Article 1 of this Federal law), the application of this procedure is allowed until July 1, 2019"

System startup: transition conditions For the AML/CFT area, the concept of “useful behavior” should be implemented: a specialist who fulfills the requirements for professional development, publications, etc. should receive qualification points (for example, academic units "AKE", etc.), which are counted instead of the professional exam and extend the term of his professional certificate from 3 years until the specialist fulfills the requirements. Such an approach, being a common practice, guarantees the continuity of education, the “prestige” of supervisory bodies activities, and also stimulates competition in the sphere of publications and speeches.

System startup: transition conditions As a result of the transition to an independent assessment of qualifications, a list of persons admitted to the profession will be formed, confirming their compliance with the requirements of the standard. Managing this list will allow: – Make the appointment system of company's official clear and transparent – Place the list in the personal account of Rosfinmonitoring and other professional sites – Track the reputation of a specialist and exclude unreliable specialists from the profession (temporarily or for a long time)

Launch of the system: educational programs market As a result of the transition to an independent assessment of qualifications in the market, only programs that prepare specialists in accordance with the professional standard will be in demand. The transformation of the educational program market will occur automatically, since the result of training in the form of a successful independent assessment of qualifications will be a natural criterion for the selection of training providers. The Council conducts a public accreditation procedure that confirms the quality of educational programs — the entire infrastructure for conducting such a procedure for AML/CFT programs is ready.