JOINT FINANCIAL INTELLIGENCE UNIT Stewart McGlynn Chief Inspector of Police Joint Financial Intelligence Unit AML Seminar to Accountants - JFIU 4 March 2010

JOINT FINANCIAL INTELLIGENCE UNIT  Suggested format & content detailed in JFIU website   Fax  Post  Verbal (urgency - follow-up by hardcopy) STR Filing

JOINT FINANCIAL INTELLIGENCE UNIT  Urgency  Confidentiality  Tipping Off  Crime Report Vs STR Concerns

JOINT FINANCIAL INTELLIGENCE UNIT  Acknowledgement of Receipt  File Ref.  Contact Person Details  Consent / No Consent Letter  Arrest / Prosecutions / Convictions  STR Quarterly Analysis Report Feedback

JOINT FINANCIAL INTELLIGENCE UNIT Case Example 1 Mr. X, Chairman of Board of Directors for ABC Company XYZ company US$9.7M loanUS$10M pledge Sole Owner of XYZ company is Mr. X

JOINT FINANCIAL INTELLIGENCE UNIT  Effective CDD / KYC  Good quality STR, allowing JFIU to perform its function  Protection Learning Points

JOINT FINANCIAL INTELLIGENCE UNIT Case Example 2 – Good Auditing Practice Company X Winding-up Audit Fraud and False Accounting

JOINT FINANCIAL INTELLIGENCE UNIT Learning Points  Reported knowledge of Crime Proceeds – Fraud  Crime report could have been made but STR acceptable in this case  Urgency? Unsure? Contact JFIU

JOINT FINANCIAL INTELLIGENCE UNIT Case Example 3 – Good KYC / CDD Director of Company X wanted in Japan Frequent substantial withdrawals from Bank account of Company X in Hong Kong KYC / CDD By Accountant for Company X Discovery

JOINT FINANCIAL INTELLIGENCE UNIT Learning Points  Common sense, proportionate approach to KYC and CDD  If it looks like a duck……….  No risk of prosecution

JOINT FINANCIAL INTELLIGENCE UNIT Think About This  Poor / Negligible CDD / KYC  Absence of risk based approach  Sub Standard STR  JFIU unable to make assessment  What would you Think?

JOINT FINANCIAL INTELLIGENCE UNIT Country Comparison STR filed by Accountants Country Employment in Accountancy in 2008 Singapore 0/2,076 (0%) 2/3,290 (0.06%) 2/7,621 (0.03%) 875 UK 14,567/ 195,702 (7.44%) 9,896/ 213,202 (4.64%) 8,110/ 220,484 (3.68%) N/A HK 0/13,505 (0%) 0/14,557 (0%) 3/15,457 (0.02%) 3715

JOINT FINANCIAL INTELLIGENCE UNIT STR filed by Accountants No. of STR Received 13,50514,55715,45714,83816,062 Filed by Accountant Percentage (%) 0.00% 0.02%0.04%0.07%

JOINT FINANCIAL INTELLIGENCE UNIT Some Final Thoughts  JFIU understands the burden that CDD and KYC entails  Law / International Standards  Increase in quality STRs from the sector desirable – intelligence is our business  JFIU is here to help – Contact us

JOINT FINANCIAL INTELLIGENCE UNIT Contact JFIU Telephone: Fax : Mail:GPO Box 6555 Hong Kong Telephone: