GLOBAL STANDARDS FOR MONEY LAUNDERING PREVENTION

Muhammad Iftikhar Arshad - Asif Mumtaz - Muhammad Adnan

Hans- Peter BauerMartin Peter

Presented by:

Wolfsberg Principles (2002) These principles are essentially global anti

money laundering guidelines for private banking. Principles are drafted by Citibank, JP Morgan,

Chase, HSBC, Barclays, Banco Santander, Central Hispano, Societe Generale, Deutsche Bank, ABN AMRO, Credit Suisse & UBS.

All these banks agreed on and committed themselves to these principles.

Principles

Banks will endeavor to accept only those clients whose source of wealth and funds can be reasonably established to be legitimate.

The bank will establish the identity of its clients and beneficial owners prior to establishing business relationships with such persons.

The private banker is responsible for updating the client file on a defined basis and/or when there are major changes

The bank will have a written policy on the identification of, and follow-up on, unusual or suspicious activities. This policy and/or related procedures will include a definition of what is considered to be suspicious or unusual and give examples thereof.

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Neither the private banker, nor any other bank employee, will provide clients with any assistance with the knowledge that such assistance will be used to deceive authorities, including tax authorities.

There will be regular management reporting established on money laundering issues.

The bank will establish a training program on the identification and prevention of money laundering for employees who have client contact, In addition, employees will be informed about any major changes in AML laws and regulations.

The bank will establish an adequately staffed and independent department responsible for the prevention of money laundering.

Why

Everybody committing financial crimes is using banking system as helping source specially in money laundering case.

To show out that private banking sector is also involved in taking initiatives against money laundering

To imply same standard in banks for prevention of money laundering

How

A few points are highlighted It took the banks four (4) sessions as well as two

days working group meeting to come to such a result.

The banks work closely with Transparency International as well as some other experts of law and finance.

All banks were driven by the recognition that for top banks in the private banking business and there should be no competition on money laundering standards.

Core Topics of Principles

These principles are global anti money laundering guidelines for private banking sector, that committed themselves to these principles.

Bank policy will be to prevent the use of its operations for criminal purpose.

Banks have to apply all these principles in each and every branch location.

For the first time private banks take steps, by stating clearly that private banks are committed to fight against money laundering.

Wolfsberg’s principles were received well by many regulators and financial bodies. Principles were cited as an example of how to deal with money laundering in finance sector. Further more UK Financial Services Authority (FSA) quoted principles as an influential factor against money laundering.