Anti-Money Laundering Office of Foreign Assets Control .ppt

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1、Anti-Money Laundering & Office of Foreign Assets Control Training,2,Welcome to Anti-Money Laundering (AML) and Office of Foreign Assets Control (OFAC) Training,The topics covered are: Welcome Introduction AML and OFAC Overview AML and OFAC Compliance Summary Conclusion,3,Welcome,Course Description W

2、elcome to the Anti-Money Laundering and Office of Foreign Assets Control course.This course was designed to provide you with an understanding of the Anti-Money Laundering (AML) and Office of Foreign Assets Control (OFAC) requirements that are applicable to CIGNA.,4,Introduction,Course Learning Objec

3、tives After completing this course, you will be able to: Identify and appreciate the importance of AML and OFAC compliance List common activities money-laundering criminals use to carry out their illegal schemes Use effective techniques to prevent, detect, and report potential money laundering Ident

4、ify the appropriate contact for business unit-specific AML and OFAC guidance Access additional AML and OFAC resources, information, and assistance,5,Introduction,Overview Today, the activities of criminals, terrorists, and terrorist organizations are increasingly more creative, complex, and intense.

5、 The insurance industry has become a target for money-laundering schemes because of the variety of products offered that can be used to hide monies related to criminal activity.Companies in the insurance industry, such as CIGNA, are obligated to aid in the prevention, detection, and reporting of: Po

6、tential money-laundering activity Transactions with those individuals, entities, and countries that are prohibited by OFAC requirements,6,AML and OFAC Overview,Lesson Learning Objectives After completing this lesson, you will be able to: Define money laundering Identify your responsibilities for rec

7、ognizing and reporting suspicious money-laundering activities Describe CIGNA processes to assure CIGNA does not conduct business with OFAC prohibited parties Identify the appropriate communications process when a customer is confirmed to be on the Specially Designated Nationals (SDN) and Blocked Per

8、sons List Identify and appreciate the importance of AML and OFAC compliance,7,AML and OFAC Overview,AML Overview Money laundering is a process by which money, resulting from or related to illegal activity, is filtered through a series of transactions that eventually make the money appear to be obtai

9、ned from “clean” legal activities.The goal of the criminal is to make the money obtained illegally (such as through drug trafficking, terrorism, and/or bribery) appear to be from a legitimate source, such as an insurance company like CIGNA. Activity of this type is purposely designed to be extremely

10、 complex so as to avoid detection. Therefore, identification of money laundering tends to be very challenging.,8,AML and OFAC Overview,AML Overview, Continued Many countries around the world are engaged in an intensive and concerted effort to combat money laundering and other financial crimes. For e

11、xample, in response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established in 1989. The FATF is an inter-governmental body that has the purpose of development and promotion of national and international level policies, to combat money la

12、undering and terrorist financing.,9,AML and OFAC Overview,AML Overview, Continued Since its creation, the FATF has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. In order to meet its objective, the FATF published 40 Recommenda

13、tions that outline actions that countries should consider as they continue their commitment to combat money laundering. A review of these recommendations provides helpful insights regarding how various AML initiatives are approached throughout the world.,10,AML and OFAC Overview,AML Overview, Contin

14、ued Money laundering and conducting business with terrorists is an illegal criminal activity in almost every country. Preventing and detecting money laundering is a world-wide priorityone in which CIGNA must play a key role! Effective employee awareness is a critical component of a successful AML co

15、mpliance program.,11,AML and OFAC Overview,Applicability to CIGNA In the past, AML requirements within the United States primarily applied to banks and brokers under the U.S. Bank Secrecy Act. This act was amended after the attacks of September 11, 2001.In October 2005, the Financial Crimes Enforcem

16、ent Network, known as FinCEN, announced that insurance companies are required to comply with AML regulations. FinCEN is an organization within the U.S. Department of the Treasury (U.S. Treasury) responsible for, among other things, analyzing information about financial transactions in order to comba

17、t money laundering, terrorist financing, and other financial crimes.,12,AML and OFAC Overview,Applicability to CIGNA, Continued The following covered products are within the scope of AML requirements: Permanent life insurance policies, other than group life insurance policies Annuity contracts, othe

18、r than group annuity contracts Other insurance plans with cash value or investment featuresWhile AML risk may vary depending on the product portfolio and geographical territory within CIGNA businesses, it is critical that employees and those working on behalf of CIGNA have a heightened AML awareness

19、 and participate in the prevention, detection, and reporting of potential money-laundering activity.,13,AML and OFAC Overview,Red Flags Employee awareness and a solid understanding of specific red flag transactions are critical components of a successful AML compliance program. Red flags are suspici

20、ous activities that indicate a particular situation warrants caution, care, and consideration. While some AML red flags might appear to be common sense, others require more attention and diligence. After reviewing the list of suspicious activities that are considered red flag indicators for money la

21、undering, take a moment to identify which scenarios you may be likely to encounter in carrying out your job, or think about other scenarios specific to your business that would raise an AML red flag for you.,14,AML and OFAC Overview,Red Flags, Continued A customer with a history of purchasing and th

22、en canceling policies A customer who is reluctant to provide identifying information when purchasing a policy, or who provides minimal or seemingly fictitious information A customer who shows little concern for the investment performance of a policy, but a great deal of concern about the early cance

23、llation features A customer with a history of overpaying premiums A customer who conducts business under other unusual circumstances or during irregular hours of operation,15,AML and OFAC Overview,Red Flags, Continued Purchase of an insurance policy that is inconsistent with the customers needs Unus

24、ual payment methods, such as cash or cash equivalents Proposals to purchase a policy using a check drawn from an account other than that of the customer Early cancellation of an insurance policy (including cancellation during a trial period), especially at a cost to the customer or where payment is

25、made by, or the refund check is directed to, an apparently unrelated third party,16,AML and OFAC Overview,Red Flags, Continued Substantial overpayment of a premium and a request that a company check be issued back to the customer for the difference (e.g., a $10,000 check for a $1,000 premium) Refund

26、s requested in a currency that is different from that used in the original premium payment Beneficiaries outside of the country where a policy is issued Change of beneficiary to an apparently unrelated third party,17,AML and OFAC Overview,Basics of CIGNAs Approach Because CIGNA is a global enterpris

27、e, there is potential exposure to money laundering. Therefore, it is important that we have solid money-laundering detection and reporting procedures. As an employee, you must comply with AML regulations and CIGNAs policies regardless of where you conduct business.,18,AML and OFAC Overview,Basics of

28、 CIGNAs Approach, Continued CIGNA is required to implement an effective AML compliance program that includes: A compliance officer responsible for developing and maintaining an effective compliance program Policies and procedures that include standardized reporting and internal controls Ongoing trai

29、ning of employees and others working on behalf of CIGNA to raise awareness regarding everyones responsibilities under the program Independent testing to monitor the programs effectivenessThrough this training course and other current AML-related activities, we want to enhance our detection capabilit

30、ies and streamline our reporting processes.,19,AML and OFAC Overview,Detection of Suspicious Activity This training program is designed to increase CIGNAs overall awareness of potential money-laundering activity. In addition, it will assist those working for, or on behalf of, CIGNA (including broker

31、s and agents) to increase the chance of identifying transactions that may appear suspicious.In accordance with CIGNAs Know Your Customer strategy, you must keep complete documentation of transactions and the identities of the account holder and/or purchaser of a policy. It is critical to obtain evid

32、ence of the customers identity and to know their “typical” activity. By knowing your customers identity and their typical activity, if a suspicious activity were to occur, identification of potential money laundering would be more easily facilitated.,20,AML and OFAC Overview,Report Potential Suspici

33、ous Activity Criminals rely on communication breakdowns to safely launder their illegally obtained money. Therefore, it is important that you know the reporting requirements related to possible money-laundering activity. Law enforcement agencies expect our full cooperation in collecting, centralizin

34、g, and evaluating the many pieces of information that are essential in the fight against money laundering. CIGNA is committed to cooperating with these agencies.,21,AML and OFAC Overview,Report Potential Suspicious Activity, Continued Suspicious activity (red flags) must be reported to your business

35、 unit Compliance Officer or AML lead. If the activity or transaction is suspected to be potential money laundering, your business unit Compliance Officer or AML lead notifies the Global AML and OFAC Compliance Officer of the suspicious transaction. He or she completes a Suspicious Transaction Memora

36、ndum and submits the form electronically to the AML Mailbox. The Global AML and OFAC Compliance Officer is responsible for reviewing the Suspicious Transaction Memorandum and notifying the business units Compliance Officer regarding whether to continue processing the transaction. The Global AML and

37、OFAC Compliance Officer, in consultation with the Chief Compliance, Ethics and Privacy Officer as appropriate or necessary, is authorized to file a Suspicious Activity Report (SAR) to FinCEN within 30 days.,22,AML and OFAC Overview,Report Potential Suspicious Activity, Continued Note: Insurance comp

38、anies are required to file Form 8300 (report of cash payments over $10,000) by the 15th day after a cash transaction occurs for all transactions of cash greater than $10,000, regardless of whether the transaction is suspicious. However, because CIGNA prohibits cash transactions in general, there sho

39、uld not be a need to initiate a Form 8300.,23,AML and OFAC Overview,AML Scenario Susan: Michael, how are you? Its been a while since weve spoken. Michael: Everythings just fine and pretty much the same as when we last talked. Same job, same familyyou knowSusan: What can I do for you today?Michael: I

40、 just realized that I overpaid my annual premium. Could you please check to see if a refund has been issued?Susan: Certainly, just one minute. I see you are due a refund of $40,654. It looks like you overpaid by $3,000 last year as well, but I see that you did receive last years refund. I can begin

41、the paperwork for this years refund right away.,24,AML and OFAC Overview,AML Scenario, Continued If you were Susan, would you be concerned?You should be.Some money launderers can be long-time customers, like Michael, with whom you have an ongoing (and even friendly) professional relationship.Do not

42、just assume all money launderers will be new customers.,25,Check Your Understanding,Remember Susans scenario? Which red flags should she have identified?A customer who is reluctant to provide identifying information when purchasing coverage, or who provides limited or potentially false information A

43、 customer with a history of overpaying premium Beneficiaries outside of the country where the policy is issued Large overpayment of premium where a company check is issued back to the customer for the differenceMake a note of all that apply. See the next page for the correct response.,26,Check Your

44、Understanding,Remember Susans scenario? Which red flags should she have identified? A customer who is reluctant to provide identifying information when purchasing coverage, or who provides limited or potentially false information A customer with a history of overpaying premium Beneficiaries outside

45、of the country where the policy is issued Large overpayment of premium where a company check is issued back to the customer for the difference Correct answer: The overpayment and refund of premium is one way to “wash” illegally obtained money, making it appear “clean” because it is from a reputable

46、company like CIGNA. There also was a previous refund requested. While the refund Michael requested last year was not a significant amount of money, multiple refunds in any monetary amount should alert you to a potential money-laundering red flag.,27,AML and OFAC Overview,Your Responsibility Now that

47、 Susan has detected a money-laundering red flag, and using your additional AML reporting knowledge, what would you advise she do about this potential money-laundering activity?Lets look at the proper reporting steps for this situation.,28,AML and OFAC Overview,Your Responsibility, Continued Report s

48、uspicious activity: Suspicious activity (red flags) must be reported to your business unit Compliance Officer or AML lead. Complete Suspicious Transaction Memorandum: If the transaction involves potential money laundering, your business unit Compliance Officer or AML lead notifies the Global AML and

49、 OFAC Compliance Officer through a Suspicious Transaction Memorandum. Review and notify: The Global AML and OFAC Compliance Officer is responsible for reviewing the Suspicious Transaction Memorandum and for notifying the business unit Compliance Officer whether to continue processing the transaction

50、.,29,AML and OFAC Overview,Your Responsibility, Continued Submit SAR: The Global AML and OFAC Compliance Officer, in consultation with the Chief Compliance, Ethics and Privacy Officer, is responsible for submitting a Suspicious Activity Report (SAR), if necessary, to FinCEN within 30 days. Do not no

51、tify the customer: U.S. federal law prohibits CIGNA from notifying a customer that a SAR was filed. Federal law (31 U.S.C.5318(g)(2) provides that a financial institution, and its directors, officers, employees, and agents who, voluntarily or by means of a suspicious activity report, notify the government of suspicious transactions, may not notify any person involved in the transaction that the transaction has been reported. Complete the transaction: In order to avoid awareness of the companys suspicions, the transaction should be completed.,