Page 51 - Banking Finance July 2024

ARTICLE

Financial Action Task Force (FATF): FATF is an
intergovernmental body, formed in 1989, that sets
internationally recognized standards for developing AML/
CFT regimes and assesses the ability of member jurisdictions
to meet these standards. In addition, FATF works to identify
specific money laundering methods and promotes
international cooperation in disrupting and dismantling
those money laundering schemes. The FATF Secretariat is in
Paris, France.

United Nations Office on Drugs and Crime (UNODC) :
UNODC is an agency within the United Nations, formed in
1997, that works to combat illicit drugs and other
international crime in more than 150 countries throughout
the world. As part of its mandate, UNODC carries out the
Global Program against Money Laundering, Proceeds of
Crime, and the Financing of Terrorism. Through this program, Forming an elite panel to devise and solidify indicators
UNODC seeks to strengthen the ability of United Nations (on classification of certain types of transactions),
member states to implement measures against money evaluate, and identify red flags, in the case of any
laundering and the financing of terrorism and to assist them misdemeanor.
in detecting, seizing, and confiscating illicit proceeds.
The Indian financial intelligence unit rolled out a new
UNODC is headquartered in Vienna, Austria and has field
process mandating all banking and financial institutions
offices in 20 countries, as well as liaison offices in New York
to file formatted cross-border wire transfer reports for
and Brussels, Belgium.
amounts exceeding INR 5 lakh.
World Customs Organization (WCO): The WCO, established Some of the key challenges to counter TBML
in 1952, is an intergovernmental body whose mission is to
are mentioned below:
enhance the effectiveness and efficiency of customs
administrations around the world and to help them in their Ineffective implementation of KYC and CDD policy and
dual role of facilitating international trade while also procedures
promoting security. WCO's membership includes customs Non-identification of red flags and inadequate enhanced
agencies from 183 countries. The WCO's Secretariat is in due diligence
Brussels, Belgium.
Delay in regulatory reporting

In India, Reserve Bank of India (RBI) has been working very Employees not adequately qualified or knowledgeable
hard toward formulating enhanced measures to tackle the Ineffective internal controls framework
issues around TBML. Some notable regulatory changes and
guidelines issued in recent times impacting TBML include: To safeguard themselves from these challenges, bankers
The passing of the Undisclosed Foreign Income and need to consider the following key pillars of TBML preventive
Assets (Black Money) and Imposition of Tax Act, 2015 mechanisms:
and Benami Transactions (Prohibition) Amendment Act, Policies and procedures- AML and compliance policies
2015. Clause 177 of the 2015 Finance Bill proposed to and procedures should contain a clear process for
club all offenses under Section 132 of the Customs Act, identifying and verifying the ultimate beneficial owner
such as false declarations, false documentation, etc., (UBO). All new and existing accounts are subject to
as offenses under the Prevention of Money Laundering verifying and identifying UBOs during account opening
Act (PMLA), 2002. or KYC update processes.

46 | 2024 | JULY | BANKING FINANCE