Chapter 4 Conducting and Responding to Investigations

Question 1

Regulatory recommendations and official findings

Answer 1

investigations that are initiated as a result of regulatory findings should be clearly documented and designed to ensure that all aspects of the findings are addressed within the time frame

senior management or higherlevel professionals should be informed of the findings of the regulatory review,
the status of measures to address them, and their final disposition to ensure the financial organization appropriately remediates the findings or recommendations

Question 1

Sources of Investigations

Answer 1

• Regulatory recommendations and official findings
• Transaction monitoring rules designed to detect and trigger alerts on potentially suspicious activity
• Referrals from customer-facing employees regarding potentially
  suspicious activity
• Information obtained from internal hotlines
• Negative media information
• Receipt of a governmental subpoena, search warrant, or other law
  enforcement request

Question 2

Transaction monitoring

Answer 2

Common approaches to transaction monitoring include the creation of in-house, customizable transaction monitoring rules or engaging a third-party vendor to assist with the development and implementation of automated rules

The organization should also have policies and procedures for monitoring for suspicious activity and clearly specify the parameters and thresholds that are set to trigger an investigation

Wolfsberg Group :Statement on Monitoring, Screening, and
Searching- transaction monitoring framework should be
aligned to the risk of its business model, the products and services offered, and its customer baseThe document additionally discusses types of monitoring, typology reviews, and staff training

Question 3

Referrals from customer-facing employees

Answer 3

manual referral processes via email or telephone, or an internal reporting system that routes the referrals to the appropriate investigative teams

Upon completion of the form by the branch, it is delivered to a
designated AML/CFT compliance email address

The existence of these referral mechanisms and the types of activity
that may warrant referrals should be included in employee training programs

Question 4

Internal hotlines

Answer 4

known as ethics, compliance, and whistleblower hotlines

The hotlines might ask the employee to provide his identity, but most allow for anonymous reporting

maintain policies, procedures, and processes to confidentially investigate the information provided through the hotline

Question 5

Negative media information

Answer 5

Investigations can be initiated in response to notable media stories about a financial organization’s customer, how a product is used in the market, a geographic location it serves, or a money laundering or terrorist event

In some instances, financial organizations might proactively
monitor media stories and initiate investigations to determine if a SAR should be filed and if further actions are necessary

Question 6

Receipt of a governmental subpoena or search warrant

Answer 6

In either situation, the organization has two independent obligations: (1) legally fulfill the requirements of the subpoena or warrant, and (2) determine whether the activity of its customer identified in the subpoena or warrant requires the filing of a SAR

Question 7

Subpoena

Answer 7

Subpoenas are usually issued by grand juries that operate under the purview of a court

the organization should ensure its senior management and/or legal counsel reviews the subpoena and independently confirms its legitimacy

The financial organization should never notify the customer being investigated

A system must be in place to ensure that all documents are located, whether they be in central files, department files, or individual files.

Documentation of the request should be maintained for at least five years after the request has expired.

Question 8

Search warrant

Answer 8

• Call the legal counsel and/or designated officer in charge of security, risk management, or a similar business area.
• Review the warrant to understand its scope.
• Ask for and obtain a copy of the warrant.
• Ask for a copy of the affidavit that supports the search warrant. The agents are not obligated to provide a copy of the affidavit; however, when a financial organization is allowed to review the affidavit, it can learn more about the purpose of the investigation.
• Remain present while the agents make an inventory of all items they seize and remove from the premises and keep track of the records taken by the agents.
• Ask for a copy of law enforcement’s inventory of what it has seized.
• Document the names and agency affiliations of the agents who conduct the search

Question 9

Orders to restrain or freeze accounts or assets

Answer 9

organization should obtain a copy of the order and make every effort to comply

Generally, such an order is obtained based on a sworn affidavit, which is sometimes included with the order

Question 10

National security letters

Answer 10

National Security Letters (NSLs) are authorized by four federal statutes: the USA PATRIOT Act, Electronic Communications Privacy Act, National Security Act, and Fair Credit and Reporting Act

These amendments significantly reduced the standards required to
issue an NSL and expanded the utilization NSLs by the FBI and other federal agencies in limited circumstances when counterintelligence and counterterrorism investigations are being conducted

common type of NSLs can be issued directly by the FBI

Third-party businesses are not permitted to disclose the receipt of an NSL (i.e., gag order).

Question 11

Sources of investigations (Case example: Preserving subpoenaed audio recordings)

Answer 11

September 2020
US Commodity Futures Trading Commission (CFTC) announced that it settled charges against Citibank and its affiliates

Citibank failed to preserve audio recordings that were subject to a hold notice in connection with a subpoena sent by the CFTC’s Division of Enforcement in December 2017

admitted that more than 2.77 million audio recordings were deleted due to a flaw in its system

CFTC determined that, from at least 2014 through at least November 2018, Citibank entities violated CFTC regulation 166.3: Failure to
supervise,According to the regulation, records subject to subpoena should be segregated and stored safely

The system reached the storage threshold in October 2018 and automatically began deleting older recordings

• Failed to adequately staff the department responsible for the oversight of audio recording preservation
• Failed to adequately train staff to understand and recognize the risks of deleting audio files based on first-in, first-out settings
• Failed to fully document system changes and ensure adequate
  procedures were in place for the system
• Failed to preserve audio recordings through system backups
• Failed to escalate the system weaknesses to Citibank management, the legal department, or any other compliance department

Question 12

Sources of investigations (Case example: Preserving subpoenaed audio recordings)-Key takeaways

Answer 12

• Records subject to subpoena should be segregated and stored safely.
• Senior management should ensure adequate systems and sufficient staff are in place to meet legal and regulatory requirements
• Recordkeeping and regulatory deficiencies should be escalated to senior management and addressed in a timely manner
• Remedial action plans should be required, implemented, and tracked for system deficiencies

Question 13

Sources of investigations (Case example: Acting on seizure warrants)

Answer 13

Regulators assessed a civil money penalty against a midsize regional bank for failing to maintain an effective anti-money laundering program

failed to file timely suspicious activity reports (SARs). Over
US$100 million in criminal proceeds from a trade-based money laundering scheme was processed through the institution over a four-year period.

the bank failed to freeze US$1.25 million in funds from the suspect account. The bank was ordered to pay a US$10 million civil money penalty and agreed to a US$1.25 million forfeiture.

The AML department also did not adopt policies requiring the review of ubpoenas, keep-open letters, and seizure warrants to determine if the underlying account activity was suspicious

In one case, the AML department failed to review an account subject to multiple subpoenas which resulted in over US$100 million in suspicious transactions

Question 14

Sources of investigations (Case example: Acting on seizure warrants)-Key Takeaways

Answer 14

• Financial organizations must implement policies and procedures to
  appropriately respond to legal orders, including timely processing of
  seizure warrants.
• Effective communication among departments within financial
  organizations is critical to ensure that suspicious activities are reported to the AML department.
• The timely filing of SARs is an important element of effective AML
  programs

Question 15

Conducting the Investigation

Answer 15

• Reviewing internal transactions, including value and volume, information obtained from the customer, and other relevant internal documentation
• Determining whether the activity is expected for the customer
• Identifying and reviewing external information to understand the
  customer, related entities, and relevant media
• Contacting business line employees who are responsible for the account relationship
• Generating a written report that documents relevant findings

A financial investigator’s main objective is to track the movement of money

important for them to develop and maintain policies and procedures regarding financial investigations. Typically, financial organizations identify the procedural steps required, the information needed to complete the investigation, and any recommended next steps

Question 16

Utilizing the internet when conducting financial investigations

Answer 16

A focused approach to searching reliable and reputable
sources can provide useful third-party information and additional context to the files held by financial organizations

Conducting research on the internet is most effective when there is a clear understanding of what online sources are considered reliable

Independent websites maintained by independent standards bodies (e.g., FATF, Wolfsberg, and OECD) and supervisory authorities (e.g., national and state-level regulators, corporate registrars, electoral rolls, and registration lists) can provide valuable information concerning regulatory status, sanctions, fines, business activities,
and broader commercial activities of the party under investigation

nvestigators must take a close look at the source of the news as well as the news itself, and why getting multiple sources is important to ensure a complete understanding of the story

Question 17

Tips on searching the internet

Answer 17

Before searching the internet, the investigator should prepare a plan, focusing on the topics under investigation and the types of information needed

The investigator should start with a metasearch using several different search engines and then move to specific search engines with different capabilities. From the metasearch

Some tips on search engines include:
* Using multiple search engines is effective because no single engine covers the entire web.
* If you are searching in a foreign country, use a local search engine.
* Use metasearch engines.

An additional step is to access a commercial database

Question 18

Conducting the investigation (Case example: Utilizing the internet when conducting financial investigations)

Answer 18

Easy Cash Ltd. is a money services business (MSB) that has been a customer of XYZ Bank Corp for seven months

open-source intelligence (OSINT),OSINT involves searching through a large variety of online sources, such as social media, news sites, public registries, and websites, in a structured and logical manner

The investigator started with a web search of the name of the customer and its ultimate beneficial owner (UBO) for potential adverse media

She also searched the names of senders and recipients of transactions using key words, for example, “money laundering” or “crime,” and Boolean operators such as “AND” or “OR.”

one of the recipients of several transactions was mentioned in multiple reliable media sources as having ties to the Italian Mafia and using Italian restaurants for laundering money

On the home page of Easy Cash, the investigator
discovered that the company was promoting its money transfer services in the Middle East and East Africa and downplaying the need to provide KYC

The investigator also used an online map service to research the address of the Turkish branch and discovered that it was located in a city near the Iranian border

Question 19

Conducting the investigation (Case example: Utilizing the internet when conducting financial investigations)-Key takeaways

Answer 19

• OSINT is an effective tool for investigations.
• OSINT uses various search engines and conducts key word searches.
• Boolean operators enhance the effectiveness of an internet search.
• Customers’ home pages can provide important information.
• Online translation services can help you utilize foreign websites in
  investigations.
• Online map applications can verify locations and determine what is
  physically near that location.
• Report to your FIU when you suspect a customer is engaged in money laundering

Question 20

SAR Decision-Making Process

Answer 20

Financial organizations should draft procedures that document the factors to consider when determining whether a SAR filing is appropriate

Often, the reason not to file an SAR is as important as the reason to file an SAR

The final decision should be documented and supported by the reasoning that was used to make the determination

if the activity presents a significant or potentially ongoing risk to the
organization, the leaders should be notified so that high-level decisions can be made regarding potential changes to systems, staffing, products, services, or specific relationships maintained by the organization

Question 21

Filing a SAR

Answer 21

The SAR filing should include the details of the suspicious activity and the related demographics, as well as the reasons the organization finds the activity suspicious.

In addition, any known typologies identified as part of the review should be included in the filing as well.

If, following the investigation, the organization decides that it should file an SAR, it should notify the investigators or prosecutors as soon as possible.

The failure to file timely reports is often cited in regulatory actions against financial organizations. The AML/CFT officer or designee should keep senior management and board members apprised of SAR filing metrics and any significant issues resulting from those filings

Finally, the financial organization should maintain a record of the SAR and all supporting documentation. Under the BSA record-retention requirements, this information should be maintained for five years following the date the SAR was filed

Question 22

Quality assurance and control

Answer 22

the quality of the SARs can be an indication of the quality of a financial organization’s AML/CFT program.

A quality assurance (QA), or quality control (QC), review helps to ensure that SAR filings are internally consistent, the right decisions are being made, and high-priority issues are identified and escalated to leadership

As a result, financial organizations that implement a QA/QC process should document the requirements and qualifications of QA/QC reviewers and regularly review the outcome of QA/QC reviews to assess the quality of staff, training requirements, and the general health of the program.

Question 23

SAR filing oversight and escalation

Answer 23

An organization should have robust policies and procedures for documenting the appropriate oversight of the investigation process and regulatory reporting requirements

Question 24

Failing to report SARs (Case example: Money laundering reporting officer)

Answer 24

June 2021, the UK updated guidance on prosecuting “failure to disclose” cases under section 330 of the Proceeds of Crime Act 2002

now legal to prosecute the offense of failing to report suspicious activity, even when the suspected money laundering activities have not yet been determined

July 2021, Dominic Thorncroft was given an 18-month suspended prison sentence and ordered to do 250 hours of unpaid work

for failing to alert the authorities to money laundering (i.e., not
reporting SARs), breaching money laundering regulations, and retaining a wrongful credit

Thorncroft was an MLRO for a money services business (MSB) and the former chair of the Association of UK Payment Institutions

Metropolitan Police found evidence linking Thorncroft
to a 2014 investment fraud

Thorncroft had allowed his MSB to be used by fraudsters to transfer money to Hong Kong and mainland China. In addition, he knowingly transferred money to the fraudsters, despite the fact that one individual was subject to a serious crime prevention order

his actions have allowed £850,000 defrauded from 60 individuals to
be dispersed across the world

Question 25

Failing to report SARs (Case example: Money laundering reporting officer)-Key takeaways

Answer 25

• Designated persons must ensure that suspicious activity is identified and reported through SARs to FIUs, to protect potential crime victims, their firms, and themselves.
• Designated persons must be held accountable, as they have a higher level of knowledge and thus responsibility compared with others in businesses

Question 26

Failing to report SARs (Case example: Deutsche Bank)

Answer 26

In October 2020, Deutsche Bank received a €13.5 million administrative fine for failing to submit SARs in a timely fashion

Deutsche Bank allegedly failed to disclose more than one million suspicious money transfers with Danske Bank Estonia, for which Deutsche Bank was the correspondent bank

The money transfers occurred over a five-year period after a whistleblower at Danske Bank flagged them as suspicious transactions

Deutsche Bank withdrew from its position as a correspondent bank
for Danske Bank Estonia over increasing concerns about potential misconduct

between 2010 and 2015, Deutsche Bank failed to send timely alerts of potentially suspicious transactions to law enforcement authorities on 627 occasions. For each of these failures, Deutsche Bank was fined between €12,500 and €30,000.

Question 27

Failing to report SARs (Case example: Deutsche Bank)-Key Takeaways

Answer 27

• Failure to report suspicious transactions can result in fines and other penalties.
• People working in regulated sectors must exercise a greater level of
  diligence by identifying and reporting any red flags that trigger suspicion.
• Financial organizations are required to report suspicious activity by filing SARs with FIUs.

Question 28

Closing the Account

Answer 28

important factors the organization should consider

• The legal basis for closing an account
• The organization’s stated policies and procedures for closing an account
• The seriousness of the underlying conduct;
• The reputational risk to the organization by maintaining the account
• Correspondence with law enforcement and requests from law
  enforcement to either cancel or maintain the account

Question 29

Communicating with Law Enforcement on SARs

Answer 29

Following the filing of the SAR, the responsible compliance
officer or designee can contact a specific law enforcement division to notify it of the recent filing and make it aware of activity relevant to its area of coverage or geographical location

a law enforcement agent can contact the financial organization that filed the SAR to seek the underlying information used in the investigation that resulted in the SAR

Therefore, it is critical that each organization develop its own policies and procedures for communicating with law enforcement regarding SARs

Question 30

Investigations Initiated by Law Enforcement

Answer 30

• Follow the money
• Leverage the financial knowledge and due diligence information contained in financial organizations: Through information sharing and transactional reviews, a financial organization can assist law enforcement in identifying the originating and ultimate destination of a subject’s funds
• Identify the unlawful activity-prosecutors need to
  establish the flow of money and the existence of a predicate offense
• Review databases: FIU databases and commercial databases can provide very useful and extensive financial information and provide leads regarding which financial organizations to ask for assistance
• Review public records:Court records, corporate filings, and credit reports
• Review licensing and registration files:
• Analyze the financial transactions and account activity of the target:
• Review SARs that might involve any potential individual linked to the target, transactions, or activity
• In cross-border cases, seek international assistance.

Question 31

Decision to Prosecute a Financial Organization for Money Laundering
Violations

Answer 31

• The organization has a criminal history
• The organization has cooperated with the investigation
• The organization discovered and self-reported the money launderingrelated
• The organization has a comprehensive and effective AML/CFT program.
• The organization has taken timely and effective remedial action.
• There are civil remedies available that can serve as punishment.
• Deterring wrongdoing by others is needed and will be served by a
  prosecution
• Advice and recommendations from regulatory agencies and/or the FIU for the jurisdiction is available.

Question 32

Responding to a Law Enforcement Investigation against a Financial
Organization

Answer 32

the financial organization needs to inform the appropriate senior management and designate an individual to respond to all law enforcement requests, monitor the progress of the investigation, and keep senior management, including the board of directors, informed of the nature and progress of the investigation

it should conduct an inquiry of its own to determine the underlying facts, the organization’s exposure, and what steps, if any, the organization should take

Question 33

Monitoring a Law Enforcement Investigation against a Financial Organization

Answer 33

Financial organizations should ensure that all grand jury subpoenas and other information requests from government agencies are reviewed by senior management and an investigations group or legal counsel

the organization should maintain centralized control over all requests and responses to ensure that it responds to requests on a complete and timely basis and maintains a complete record of information provided

The organization should also address its document destruction policy to ensure that no documents are destroyed pursuant to that policy during the investigation

It must ensure that an appropriate system is in place to organize, maintain,number, secure, copy, and prepare the documents for production to the government (or to the opposing party in civil litigation)

Question 34

Cooperating with Law Enforcement During an Investigation against a Financial Organization

Answer 34

At a minimum, a positive working relationship will help the organization conduct an effective parallel internal investigation and thereby position the organization to respond more effectively to investigative and prosecutorial inquiries.

Question 35

Obtaining Counsel for an Investigation against a Financial Organization-Retaining counsel

Answer 35

It might be appropriate for the organization to retain legal counsel to assist in responding to the investigation or advising the organization during the course of the investigation

it should take appropriate measures to ensure that the
counsel is sufficiently experienced and knowledgeable regarding the factual and legal issues involved. In addition, the organization should determine the nature and scope of the role of counsel and ensure that senior management is aware of and supports the involvement of counsel.

Question 36

Attorney-client privilege applied to entities and individuals

Answer 36

attorneys for the organization represent the entity and not its employees

Counsel should understand these issues and conduct the internal investigation accordingly

There can be serious consequences when the interests of an entity and its employees diverge or conflict, and when an employee implicates the employer, or vice versa. In such cases, separate counsel could be required.

Question 37

Dissemination of a written report by counsel

Answer 37

If counsel for the organization prepares a written report of an investigation,Every page of the report should contain a statement that it is confidential and subject to the attorney-client privilege and work-product privilege

Copies of the report should be numbered, and a list of people who are given copies to read it should be maintained. After a specific period of time, all copies should be returned.

Question 38

Notices to Employees as a Result of an Investigation against a Financial Organization

Answer 38

In investigations conducted by the government, employees should be
informed of the investigation and instructed not to directly produce corporate documents

inform senior management or counsel of all requests for documentation and provide the documents to them for production

The same procedure should be followed with requests for employee interviews.

Question 39

Interviewing Employees as a Result of a Law Enforcement Investigation against a Financial Organization

Answer 39

it is important to interview all knowledgeable employees

In addition, the organization, usually counsel, should prepare employees who expect to be interviewed by law enforcement investigators and debrief them after their interviews

It is also helpful for interviews to be as noncontentious as possible.
Background and open-ended questions should be used at the beginning of the interview, together with a nonconfrontational review of documents

Question 40

Media Relations

Answer 40

If the facts are not on the institution’s side, “no comment” might be the best response it can offer

Misleading or false statements that attempt to indicate that the organization has no problems and has done nothing wrong can worsen the situation. When such statements are made by a publicly traded company, they can invite additional scrutiny by regulatory and law enforcement agencies.

Question 41

Media relations (Case example: Cooperation with regulatory authorities to reduce fine)

Answer 41

October 2021,(FCA),fined Credit
Suisse bank over £147 million for serious anti-financial crime (AFC) due diligence failures related to loans that it provided to the Republic of Mozambique

the bank failed to properly manage the associated financial crime risks within its emerging markets business.

2012 and early 2016, Credit Suisse was given information that
should have revealed the unacceptably high risk of bribery associated with the loans and bond exchange the bank provided to a Mozambique government

To secure more favorable terms for the loans, kickbacks
estimated to be over US$50 million were paid to members of a Credit Suisse unit who took steps to conceal these from the bank’s senior management.

Insufficient challenge, scrutiny, and investigation into significant red flags concerning the transactions

Credit Suisse agreed to pay US$475 million in fines and penalties as part of a coordinated international resolution with criminal and civil authorities in the United States, Switzerland, and the United Kingdom

Credit Suisse would also be subject to enhanced compliance and selfreporting, and the Swiss Financial Market Supervisory Authority (FINMA) would appoint an independent third party to review compliance measures and existing transactions involving weak and corruption-prone countries and companies

Question 42

Media relations (Case example: Cooperation with regulatory authorities to reduce fine)-Key takeaways

Answer 42

• Organizations need to have robust AFC policies and procedures in place and ensure their proper execution
• When systemic issues are discovered, cooperation with regulators can lead to a reduction in fines and penalties
• Regulators are cooperating globally to address AFC failures and associated impacts

Question 43

FATF Recommendations on Cooperation
between Countries

Answer 43

Recommendations 36 through 40 of FATF’s 40 Recommendations on
establishing and maintaining effective AML/CFT programs pertain specifically to the international aspects of money laundering and terrorist financing investigations

Question 44

International Money Laundering Information
Network

Answer 44

The International Money Laundering Information Network (IMoLIN) serves as a clearinghouse of money laundering information for the benefit of national and international AML agencies

It was developed and is administered by the Global Programme against Money Laundering, Proceeds of Crime, and the Financing of Terrorism of the United Nations Office on Drugs and Crimes on
behalf of the UN and other international organizations, including Interpol

IMoLIN has five main features:
1. Anti-Money Laundering International Database (AMLID): A compendium and analysis of national AML laws and regulations, as well as information on national contacts and authorities (the database is password protected)
2. Reference data: Research and analysis, bibliography, conventions, legal instruments, and model laws
3. Country page: Full text of AML legislation, where available, and links to national FIUs
4. Calendar of events: Chronological listing of training events, conferences, seminars, workshops, and other meetings in the AML field
5. International norms and standards: Details UN conventions, model laws, and other international standards

Question 45

Mutual Legal Assistance Treaties

Answer 45

Mutual legal assistance treaties (MLATs) provide a
legal basis for transmitting evidence that can be used for prosecution and judicial proceedings

Procedures can vary, but the typical process for requesting evidence from another jurisdiction involves:
* The central authority of the requesting country sends a commission
rogatoire (letters rogatory, or letter of request) to the central authority of the other country.
* The central authority that receives the request sends it to a local financial investigator to determine if the information is available.
* An investigator from the requesting country then visits the country from which the information is sought and accompanies the local investigator during visits or when statements are taken.
* The investigator asks the central authority for permission to remove the evidence to the requesting country.
* The central authority sends the evidence to the requesting central
authority, thereby satisfying the request for mutual legal assistance. Local witnesses may need to attend court hearings in the requesting country.

Question 46

Financial Intelligence Units

Answer 46

FIUs are mandatory national agencies that handle financial intelligence

The first FIUs were established in the early 1990s in response to the need for a central agency to receive, analyze, and disseminate financial information to combat money laundering.

the FIUs of Luxembourg, UK, Italy, and France joined the Dutch FIU in its initiative to create a decentralized network for the FIUs to exchange information in a more sophisticated way. With the start of the pilot project in 2004

In 2012, FATF adopted a revised set of recommendations on combating money laundering that, for the first time, included explicit recommendations for the establishment and functioning of FIUs

In 2016, the European Union initiated several measures to
strengthen the role of FIUs and their ability to share information across Europe as part of its comprehensive action plan toward the fight against terrorism.

Question 47

Three basic functions of an FIU

Answer 47

1.Receive 2.Analyse 3. Dissemination

Recommendation 29 states that countries should establish an FIU that serves as a national center for the receipt and analysis of: (a) suspicious transaction reports and (b) other information relevant to money laundering

Articles 30 and 31 of the Recommendations outline the powers of FIUs

• Responsibility for money laundering and terrorist financing investigations within the framework of national AML/CFT policies
• At least in all cases related to major proceeds-generating offenses,
  developing a proactive parallel financial investigation when pursuing
  money laundering, associated predicate offenses, and terrorist financing,
• Expeditiously identifying, tracing, and initiating actions to freeze and seize property that is or might become subject to confiscation, or is suspected of being proceeds of crime
• Access to all necessary documents and information for use in those
  investigations and in prosecutions and related actions
• Using a wide range of investigative techniques suitable for the investigation of money laundering,

Question 48

FIU

Answer 48

The Egmont Group of FIUs has established a model for MOUs. Unlike the MLATs, MOUs are not typically used for obtaining evidence, but for obtaining intelligence that might lead to evidence.

The Australian Transaction Reports and Analysis Centre (AUSTRAC), founded in 1989The UK’s FIU is part of the National Crime Agency (NCA). The NCA became operational in 2013 US, FinCEN was established in 1990

Question 49

“Principles of Information Exchange between Financial Intelligence Units

Answer 49

June 2001, Egmont group, incorporated the document into its Statement of Purpose
This document describes practices that maximize cooperation among FIUs and can be useful to government authorities when considering AML legislation

Key principles included in the document include:

• The Egmont principle of free exchange of information at the FIU level should be possible on the basis of reciprocity
• Differences in the definition of offenses that fall under the competence of FIUs should not be an obstacle to the free exchange of information at the FIU level.
• The exchange of information among FIUs should take place as informally and as rapidly as possible and with no excessive formal prerequisites
• When an FIU needs a memorandum of understanding to exchange
  information, it should be negotiated and signed by the FIU
• It should be possible for communication among FIUs to take place directly, without intermediaries.
• Providing an FIU’s consent to disseminate the information for law
  enforcement or judicial purposes should be granted promptly and to the greatest extent possible

Question 50

The following practices should be observed by the FIU requesting the information

Answer 50

• All FIUs should submit requests for information in compliance with the Principles of Information Exchange established by the Egmont Group. When applicable, the provisions of information-sharing arrangements among FIUs should also be observed.
• Requests for information should be submitted as soon as the precise assistance required is identified.
• When an FIU has information that might be useful to another FIU, it should consider supplying it spontaneously as soon as the relevance of sharing this information is identified.
• The exchange of information among Egmont FIUs should take place in a secure way. To this end, the Egmont FIUs should use the Egmont Secure Web (ESW) when appropriate.

Question 51

The Egmont Group released a revised charter

Answer 51

updates to:
* Unite efforts to improve an effective exchange of information upon
request and spontaneously to combat money laundering and financing of terrorism.
* Exchange information on their respective experiences to promote the development of effective FIUs
* Support the Egmont Group members to enhance their capacity by
promoting operational independence of FIUs

utilizing MOUs was in October 2013, when FinCEN and Mexico’s National Banking and Securities Commission executed the first-ever MOU to facilitate the exchange of supervisory information in support of both agencies’