This report reviews observance of Standards and Codes for the Financial Action Task Force (FATF) 40+9 Recommendations and the Anti-money Laundering and Combating the Financing of Terrorism (AML/CFT) measures in place in Finland. The report describes the level of compliance with the FATF 40+9 Recommendations, and contains recommendations on how the AML/CFT system could be strengthened. The report reveals that Finland has a good legal structure to combat money laundering and terrorist financing.
transactions from a period of 48 hour up to 10 days, when necessary after the filing of a SAR. There should be a specific administrative sanction for violations of the tipping-off prohibition.
The external audits for due diligence for banks are currently required to be conducted separately from the supervisory audits and by different auditors. This framework does not capitalize on depth of management and internalcontrolinformation available in the supervisory audit, and may result in gaps of coverage.
The due diligence audit for banks should be conducted by the
with the assistance of IA staff already stationed there. Examples of specialist skills that can be usefully dedicated to cover such areas are:
audit of internalcontrols, information systems, systems audit; procurement/contract audit; IA review of critical areas, such as pending bills, commitments, revenue collection, loan recovery, and debt management; audit of payroll and pension systems, manpower audit; and cost assessment audit in assigned ministries.
These teams should also be reserved for more complex and specialized tasks or for any special requests from
moderate level of understanding of risk in the financial sector. Its processes are highly dependent on the correct implementation of the prescribed risk assessment methodology by FIs and their ability to understand ML/TF risk. The quality of control measures is verified using about 20 criteria. Internalcontrolinformation of uneven content and quality is also received from the sector FI regulators on their own observations on the effectiveness of internal controls applied to ML/TF risks. The online lending sector is not subject to this process. The PBC’s level of
International Monetary Fund. Monetary and Capital Markets Department
internalcontrols, information systems, and audit programs are paramount to the success of the risk-based approach followed by the SSF . The SSF needs to design and compile proxy indicators of capacity, processes and practices to benchmark the evaluation of systems and controls among institutions. The SSF needs also to specify in further detail to the industry its expectations regarding the characteristics it wishes to see in operation to attest their effectiveness and reliability, including evaluating the amount of resources invested in controls and central functions
audits for due diligence for banks are currently required to be conducted separately from the supervisory audits and by different auditors. This framework does not capitalize on depth of management and internalcontrolinformation available in the supervisory audit, and may result in gaps of coverage . The due diligence audit for banks should be conducted by the same auditor that conducts the supervisory audit. These audits should be conducted in a coordinated manner, if not concurrently. The statutory requirement for independence is sufficient to ensure that audits
• China has undertaken a number of initiatives since 2002 that have contributed positively to its understanding of ML/TF risk, although some important gaps remain. Its framework for domestic AML/CFT cooperation and coordination is well established.
• China’s decentralized financial intelligence unit (FIU) arrangement consisting of China Anti-Money Laundering Monitoring and Analysis Center (CAMLMAC), Anti-Money Laundering Bureau (AMLB), and 36 People’s Bank of China (PBC) provincial branches has high potential to produce financial intelligence that supports the operational needs of competent authorities, but its current functioning results in incomplete access by all parts of the FIU to all data, fragmented analysis and disseminations, and limits the development of a holistic view. Therefore, major improvements are needed.
active role in AML-focused inspections and enforcement and rely less on AML/CFT matters to be uncovered during the prudential inspection programme.
It is recommended that the FSA and ISA clearly require reports submitted by institutions as part of off-site control include all AML/CFT-related internalcontrolinformation.
Finland is encouraged to continue with its planned implementation of supervision as part of the next AML/CFT law. Standards and guidance will need to be provided to these businesses and measures will be needed which prevent criminals from having a
The financial sector in Liechtenstein provides primarily wealth-management services, including banking, trust, other fiduciary services, investment management, and life insurance. The establishment of the Financial Market Authority (FMA) as the unified, independent regulator in January 2005 is a huge step for the financial services industry. The FMA and other authorities have been successful in implementing most of the recommendations provided in the earlier 2002 IMF assessment. The authorities and the industry continue to make significant efforts to strengthen the antimoney laundering regime, though there is still work ahead.
The internal audit function has received increasing attention as an important component of government financial management and a tool for improving the performance of the government sector. Recently, a consensus has been reached on what audit standards governments should meet. This paper reviews these standards from an international perspective, noting that a large number of countries would face severe problems of meeting such standards. It is argued that internationally there are many different models for internal audit, and it may be necessary to take into account different audit traditions and different institutional capacities when introducing measures to strengthen internal audit in developing and transitional countries. The paper then discusses the main issues to be addressed in developing the internal audit in such countries, and offers a framework for introducing much needed reforms in this area.