WEBVTT

00:02.100 --> 00:05.818
Welcome to our corporate Anti Money Laundering training session. This

00:06.018 --> 00:09.737
video is part of your mandatory employee onboarding.

00:09.937 --> 00:12.537
Our company is required by the regulatory framework to put in place

00:12.737 --> 00:15.337
checks to prevent the facilitation of movement of illegal

00:15.537 --> 00:18.137
transactions.

00:18.337 --> 00:21.554
All employees must familiarize themselves with the process of money

00:21.754 --> 00:24.970
laundering, which the criminal businesses use to disguise the true

00:25.170 --> 00:28.387
origin and ownership of illegal cash.

00:29.100 --> 00:32.320
Money laundering is the process of making illegally-gained proceeds

00:32.520 --> 00:35.741
appear legal. Criminals use money laundering to conceal their crimes

00:35.941 --> 00:39.162
and the money derived from them.

00:39.860 --> 00:43.417
One common technique is to facilitate the flow of money through a

00:43.617 --> 00:47.175
legitimate cash-based business, typically owned by affiliates of a

00:47.375 --> 00:50.932
criminal organization. The supposedly legitimate business brings the

00:51.132 --> 00:54.690
money into the legal banking system, deposits the money as income,

00:54.890 --> 00:58.447
which the criminals can then transfer or withdraw.

00:59.140 --> 01:01.471
There are several ways transfers are disguised to avoid suspicion,

01:01.671 --> 01:04.002
including

01:04.202 --> 01:06.652
Transfers to foreign countries

01:07.352 --> 01:10.302
Depositing cash in smaller increments

01:11.002 --> 01:13.865
Buying other cash-equivalent instruments

01:14.565 --> 01:17.452
Another common technique is for launderers to invest the money, using

01:17.652 --> 01:20.540
dishonest brokers who are willing to ignore the rules in return for

01:20.740 --> 01:23.627
large commissions.

01:23.827 --> 01:26.090
Our company is not like that.

01:27.780 --> 01:31.698
The next slide contains a statement. You will have two seconds to

01:31.898 --> 01:35.817
think about it, and evaluate if it is true or false.

01:36.500 --> 01:38.731
Money laundering is the concealment of the origins of illegally

01:38.931 --> 01:41.162
obtained money.

01:44.860 --> 01:46.797
The statement was true!

01:47.500 --> 01:50.606
In this section, we will look into an important process to prevent

01:50.806 --> 01:53.912
money laundering, customer due diligence.

01:54.112 --> 01:57.000
Customer due diligence is the process of identifying your clients and

01:57.200 --> 02:00.087
checking they are who they say they are.

02:00.780 --> 02:03.680
When you onboard a client, you will need to request certain

02:03.880 --> 02:06.780
documents, and then you or your staff should review them. You must

02:06.980 --> 02:09.880
advise your staff of any red flags, for example if the client is

02:10.080 --> 02:12.980
being evasive.

02:13.180 --> 02:15.455
Why it CDD important?

02:15.655 --> 02:19.505
Criminals try to mask their true identity, by providing fraudulent

02:19.705 --> 02:23.555
documents or using complex ownership structures. The purpose of this

02:23.755 --> 02:27.605
process is to know a client's identity and understand their business

02:27.805 --> 02:31.655
activities, so you can properly manage money laundering risks.

02:31.855 --> 02:34.655
You must understand normal practice in order to detect abnormal

02:34.855 --> 02:37.655
events and red flags.

02:37.855 --> 02:41.680
You must perform a risk assessment in the following categories:

02:41.880 --> 02:45.712
Customer risk: What do they do? Is there business cash intensive?
If

02:45.912 --> 02:49.745
they sell a product, is it high risk?
If they provide a service, do

02:49.945 --> 02:53.777
they usually do it remotely, without meeting their clients?
Will they

02:53.977 --> 02:57.810
receive payments from third parties?
Is the client based in a high-

02:58.010 --> 03:01.842
risk jurisdiction?

03:02.042 --> 03:05.095
Once you complete the assessment, our company will categorize the

03:05.295 --> 03:08.348
client into low, medium or high risk. This risk categorization

03:08.548 --> 03:11.601
determines which level of due diligence is required to onboard the

03:11.801 --> 03:14.855
client.

03:15.540 --> 03:18.552
In the following section, you will need to review some client

03:18.752 --> 03:21.765
profiles and determine their risk. Would you classify them as high,

03:21.965 --> 03:24.977
medium or low risk?

03:25.177 --> 03:28.152
You will have 3 seconds for each scenario.

03:28.859 --> 03:31.222
Consider this client profile.

03:31.422 --> 03:35.279
A massage parlour is located in the East Village neighbourhood of New

03:35.479 --> 03:39.336
York, mostly dealing with cash. They are open during the week days

03:39.536 --> 03:43.393
from 5PM to 2AM, and do not have any visible internet presence. No

03:43.593 --> 03:47.451
web site, no social media accounts. While researching the vicinity,

03:47.651 --> 03:51.508
you discover several news articles about arrests from raids on

03:51.708 --> 03:55.565
prostitution rings run from ‘massage parlours’, but the client you

03:55.765 --> 03:59.622
are onboarding was not named in any reports.

03:59.822 --> 04:03.366
Would you classify them as high, medium or low risk? Why? You have 3

04:03.566 --> 04:07.109
seconds.

04:11.820 --> 04:14.357
The correct answer is High Risk.

04:14.557 --> 04:16.913
This is a cash-intensive business, which automatically requires more

04:17.113 --> 04:19.469
scrutiny.

04:19.670 --> 04:23.469
Having no website is odd for a legitimate business today.

04:23.670 --> 04:26.357
The operating hours are unusual.

04:27.060 --> 04:29.297
Consider the next profile.

04:29.497 --> 04:32.960
A small design agency, with a sole director and beneficial owner. The

04:33.160 --> 04:36.622
business has been trading for five years, with mostly corporate

04:36.822 --> 04:40.284
clients, and electronic payments. Their profits are in line with

04:40.485 --> 04:43.947
industry statistics.

04:44.147 --> 04:47.722
Would you classify them as high, medium or low risk? Why? You have 5

04:47.922 --> 04:51.497
seconds.

04:58.180 --> 05:00.879
The correct answer is Medium Risk.

05:01.080 --> 05:05.436
The business is not cash-intensive, and the structure is simple. The

05:05.636 --> 05:09.992
company has operated for several years without raising red flags.

05:10.192 --> 05:13.417
Why not low risk? Refer to ‘Low-risk factors’ within appendix Z of

05:13.617 --> 05:16.842
the AML guidance.

05:17.540 --> 05:20.991
Create corporate training videos like this one easily using Narakeet.

05:21.191 --> 05:23.900
Add voice over text to speaker notes and upload a Powerpoint file to

05:24.100 --> 05:26.808
turn it into a narrated video in minutes.

05:27.008 --> 05:29.681
The video you are watching now was created using a Powerpoint

05:29.881 --> 05:32.555
presentation and Narakeet text to speech voices.

05:33.260 --> 05:36.003
For more information, check out Narakeet.com