We set minimum, mandatory, Group-wide standards for AML and CTF, based on the requirements of the UK Financial Services Authority (FSA) and industry guidance such as the Joint Money Laundering Steering Group (JMLSG). We then amend these standards to conform to local legislation in our non-UK markets.
We perform risk based due diligence on all new customers, including verification of their identity and, where appropriate, an assessment of the source of their wealth and funds. We use sophisticated software systems such as Norkom to monitor transactions for suspicious behaviour associated with AML and CTF.
We comply with all suspicious activity reporting required of us by the regulators and law enforcement agencies in our markets.
We provide training for our employees on our customer due diligence policies and procedures, including how to detect and report suspicious activity. In 2010, 65,698 employees completed our AML eLearning programme. We also provide mandatory specialist training for employees in our cash, trade and small and medium-sized enterprise (SME) businesses.
Our Suspicious Activity Reports can make a real difference to the efforts of governments in tackling the type of fraud that impacts society as a whole.
In 2010, we co-operated with the UK and Hong Kong authorities by making a number of disclosures regarding suspect bank accounts. These were later found to been used by organised crime groups to launder illicit funds arising from carousel frauds – where a trader disappears without paying value-added-tax (VAT) during a cross-border transaction.
As a result of the information provided, a substantial cross-border operation was carried out in the UK and Germany in April 2010, involving nearly 2,500 UK and German tax officials and over 80 house and office searches, leading to the arrest of more than 20 people in the UK.
Her Majesty’s Revenue & Customs stated that the early identification of these frauds saved the UK government very substantial sums, with the overall size of the fraud estimated at approximately GBP4.5 billion. We received a letter of congratulation from the UK authorities, thanking us for our assistance.
SC First Bank, a subsidiary of the Group, has actively engaged with the Financial Supervisory Service and the Korea Financial Intelligence Unit to share our AML practices, participate in regulator organised AML committees and provide feedback to proposed new AML regulation. Our contribution gained wide recognition from both the regulator and the industry, resulting in Standard Chartered being awarded the ‘Chairman Award’ in November 2010 by the Financial Supervisory Commission. The award recognises our contribution to Korea’s financial industry in the area of anti-money laundering.