Ladies and Gentlemen:
I appreciate the opportunity to address this Forum, clearly a collection of many leaders in the AML/ CTF community. It is also a testament to SAS that they have continued to provide this opportunity for participants to enhance their understanding of recent events, policies and cases impacting both the private and public sector. We cannot progress in our compliance and detection obligations if we do not stay abreast of new methods of moving illicit funds. As I frequently urge conference attendees at our ACAMS programs, take advantage of your time here, ask questions, network and leave with more information relevant to your AML roles than when you arrived.
We stand at a crossroads in 2012 regarding private-public sector challenges for AML, now so broadly defined. With dramatic penalties and formal criticisms impacting the financial sector and, I might add, the regulatory oversight community, our collective next steps will determine the overall success of the AML community in deterring money laundering, corruption and financial crime. As the late Senator Daniel Patrick Moynihan, one of the most intelligent figures in the 20 th Century, once said, “you are entitled to your own opinion but you are not entitled to your own facts.”
So as we address AML compliance burdens with limited resources, the financial sector cannot make statements such as “sanctions are too difficult and they don’t work.” Sanctions are an effective national security tool—perhaps not easy to always get right but the impact on the movement of funds and isolating certain regimes is undeniable.
On the regulatory front, the examiners have way too much leverage because of all they can review to find gaps and deficiencies. Are financial institutions perfect? Of course not but positive feedback is lacking in this process. In addition, when an examiner substitutes subjectivity into a clearly crafted AML program and it becomes a formal criticism, the institution in question has no practical recourse and you just may have harmed an effective process or policy that will limit critical information to law enforcement. While appeal processes and the various agency ombudsmen are available in theory, one would be foolish to use that vehicle.
So what is the answer?
I am certainly only one voice in this community but I believe there are directions to a joint effort that can succeed. It is three simple concepts—coordination, cooperation and communication.
With the breadth of obligations facing an AML professional today, all financial institutions in 2012 should be moving toward or actually be already there to an enterprise wide response to AML writ large. Sanctions, financial crime, corruption, ethics and many other areas should be either centralized or coordinated. I know our hosts at SAS have long advocated a coordinated approach and we at ACAMS have been programming with that goal in mind for a number of years.
Cooperation should be a given since AML professionals have a history of working relationships with law enforcement. However, cooperation means also with peer institutions, when allowed, and among law enforcement agencies—stop the turf wars.
Finally, communication is such a lost art in 2012. How we describe the impact of enforcement actions on our institutions, clear messaging to senior management and lines of business on new regulatory changes, and training are all areas of needed improvement. In addition, while there are formal processes for “communicating” to regulators in the form of comment letters, if that is all you do, you will have failed. Communication is also woefully lacking from those same regulators, who sometimes hide behind the Administrative Procedures Act as a way to not “listen” to the impacted in other forums. Outreach means listening not simply talking.
I have been fortunate to have spent my entire career in the AML field. I remain optimistic that together we can succeed. Interacting at excellent program such as this is more than a first start.