1. Slide 1 Mike Trigg Group Money Laundering Reporting Officer

2. Slide 2 What is Money Laundering? The means used by criminals to hide, or disguise the origin of, the proceeds of criminal activity.

3. Slide 3 Standard Chartered Over 50 countries Different regulatory regimes Varied risk environments Full range of banking activities

4. Slide 4 Why Are Banks Concerned? Litigation Regulatory Sanctions Reputational Impact –media coverage –regulatory relationships –customer and investor confidence

5. Slide 5 Changing Regulatory Environment Political Pressure New Laws Stronger Regulation International Issue

6. Slide 6 Changing Emphasis From passive reporting to active prevention More active enforcement by regulators Wider scope of coverage - lawyers, accountants Shift in focus to tax,corruption,terrorism

7. Slide 7 Response (1) - Ownership and Accountability Complex Issue Need clear ownership Need clear organisation structure

8. Slide 8 Response (2) - Policy and Standards Board approved Group Policy More detailed Group Standards Local Procedures and Controls

9. Slide 9 Response (3) - Know Your Customer Identity - nominees, agents, trusts Source of Wealth Type of Business - KYC and Account Regular Reviews Context for Transaction Reporting

10. Slide 10 Response (4) - Retaining Records Five year period Identification Records Transaction Records Method of Storage - Access International transactions

11. Slide 11 Response (5) - Reporting Transactions What is suspicion? Internal reports External disclosure Automated systems

12. Slide 12 Reporting - Continued Different reporting regimes More difficult to identify transactions Cross jurisdictional transactions

13. Slide 13 Response (6) - Training Information and Awareness Computer Based - Testing Senior Managers Law Enforcement and Regulators

14. Slide 14 Response (7) - Monitoring Internal Audit Operational Risk Tools Special Reviews Regulator’s role

15. Slide 15 Conclusions The pressure is increasing The problem is international Banks can play their part: –Ownership, Policy and Standards –KYC, Training,Reporting But Industry/Regulator Partnership is Essential