Financial Crime World

Gaps in National Risk Assessments and Serious Organized Crimes Threat Assessments Exposed

Introduction

A recent review has revealed significant gaps in the national risk assessments (NRAs) and serious organized crimes threat assessments (SOCTAs) conducted by various government departments, law enforcement agencies, and regulatory bodies. The assessment of risks related to terrorism financing (TF) and foreign terrorist fighters (FTF) was not included in the NRA, despite being a critical concern.

Coordination and Cooperation

The National Anti-Money Laundering Council (NACC) operates alongside existing operational coordination committees, but its potential to establish a better coordinated response has yet to be demonstrated. Limited cooperation and coordination have been observed through the NACC’s respective sub-committees on predicate offenses.

  • The review highlights the need for improved coordination among government departments, law enforcement agencies, and regulatory bodies.
  • Enhanced engagement with private sector stakeholders is necessary to ensure a comprehensive understanding of AML/CFT risks.

Action Plans and Implementation

Objectives set for anti-money laundering and counter-terrorism financing measures under the National Anti-Money Laundering Council Scheme (NACS) correspond to key risks, but similar objectives are not apparent for law enforcement agencies. The implementation of action plans under NACS has been slow, with some enhanced and simplified measures instituted based on identified risks.

  • Law enforcement agencies lack clear objectives for AML/CFT measures.
  • The implementation of action plans has been slow, with limited progress made in addressing key risks.

Private Sector Awareness

Private sector stakeholders are aware of the results of risk assessments undertaken under NRAs, but understanding and response vary across different sectors. Larger banks have developed a more comprehensive understanding of AML/CFT risks, while other financial institutions (FIs), casinos, and designated non-financial businesses and professions (DNFBPs) have less developed awareness.

  • Private sector stakeholders are aware of the results of risk assessments, but understanding and response vary across different sectors.
  • Larger banks have a more comprehensive understanding of AML/CFT risks, while other sectors lag behind.

Financial Intelligence

The Anti-Money Laundering Council (AMLC) produces financial intelligence products primarily used by its Financial Crime Investigation Group. However, requests from law enforcement agencies to AMLC’s Financial Intelligence Analysis Group are limited, and spontaneous dissemination of financial intelligence is not in line with ML/TF risks.

  • The AMLC produces financial intelligence products, but requests from law enforcement agencies are limited.
  • Spontaneous dissemination of financial intelligence is not aligned with ML/TF risks.

Suspicious Transaction Reports

AMLC has received a large number of suspicious transaction reports (STRs) and covered transaction reports (CTRs), but the quality of STRs is improving. The FIU part of AMLC was critically understaffed at the time of the onsite visit, hindering its analytical capability.

  • AMLC receives a large number of STRs and CTRs, with improved quality.
  • The FIU part of AMLC was understaffed, limiting its analytical capacity.

Information Dissemination

There are no barriers to disseminate information from AMLC’s Financial Intelligence Analysis Group to its investigation wing, but concerns remain about AMLC’s operational independence and timeliness of PEP information exchange. AMLC rarely proactively disseminates financial intelligence to other law enforcement agencies, and these agencies do not regularly seek financial intelligence in support of their investigations.

  • Information dissemination from AMLC’s Financial Intelligence Analysis Group is limited.
  • Concerns remain about AMLC’s operational independence and timeliness of PEP information exchange.

Conclusion

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The findings highlight the need for improved coordination and cooperation among government departments, law enforcement agencies, and regulatory bodies to effectively address money laundering, terrorist financing, and predicate crimes. Enhanced engagement with private sector stakeholders is also necessary to ensure a comprehensive understanding of AML/CFT risks and effective implementation of measures to mitigate them.

  • Improved coordination and cooperation are essential for addressing ML/TF and predicate crimes.
  • Enhanced engagement with the private sector is necessary for a comprehensive understanding of AML/CFT risks.