PREVENTION OF MONEY LAUNDERING – CATHEDRAL INVESTMENT BANKPrevention System: a continuous process
At Cathedral Investment Bank, it constitutes a strategic objective to have an effective and advanced Anti-Money Laundering System. Therefore, since 2002, when the first steps were internally taken to implement such program, the procedures have been continously adapted and perfected.
From the beginning stages of creating and implementing these internal regulations and procedures, preventive operation reviews were generalized, also those considered as higher risk clients were targeted to be audited.
Later, emphasis was given to implementing the same procedures in all international affiliates. The corporative prevention system developed in the United States, is one of the most secure and stable worldwide.Cathedral Investment Bank Anti-Money Laundering System Pillars are: – Institutional support with involvement at all levels of the organization – A more demanding internal legislation than official standards – Transactions analysis conducted by those who know the client – Strict and thorough investigation of suspicious operations – Systematic and permanent review of offshore branches – Internal Audit Area and Formation Department support – A proactive approach to handle risk situations – Prevention as priority over any commercial interest Internal Legislation
Cathedral Investment Bank Administration Council, the holder of the anti-money laundering policy and terrorism financing, approves it as proposed by Cathedral Investment Bank Committee of Analysis and Resolution (CAR). Further modifications must be approved by the Administration Council, by proposal, in this case, by the (CAR).It is CAR responsibility to approve legislations needed for development of this policy in the Group Units. The legislations are collected from the Anti-Money Laundering Corporative handbook and from specifics Private Banking and Correspondents Banking Money Laundering Preventing handbooks. These three handbooks are adapted and are being implemented by the affiliates abroad.
For all intents and purposes of this legislation and policies, as well as the procedures for its development, financing terrorist activities is consider to be covered within the concept of money laundering.Internal Organization In offshore jurisdictions: Its foundation lays upon three entities: Committee of Analysis and Resolution (CAR), Money Laundering Prevention Central Department (MLPCD), and those in charge of Prevention. CAR is a collegiate entity chaired by the General Secretary and composed by a board of directors representing most committed areas (Commercial Networks, Legal, Private Banking, Compliance, Internal Audit, Human Resources, Training and Affiliates). CAR is responsible for proposing to Cathedral Investment Bank Board of Directors any policy modifications or approvals, define their scope and establishing overall objectives, as well as formulating performance standards to the different bodies and institutions of the Group regarding the Money Laundering Prevention. CAR also has the ultimate decision on the relevant issues on this same topic that may involve a legal or reputational potential risk. MLPCD is incorporated into the General Secretariat and based on four areas: National, International, Private Banking, and Planning. It is a department specialized in money laundering prevention with functional responsibility in this field for all banks, business, and affiliates to Cathedral Investment Bank worldwide. The Responsible for Prevention entity has been created in four different levels: Area, Unit, Office, and Account. These share the task to support the MLPCD from a privileged position, close to their customers and operations. Operational Risk Analysis Cathedral Investment Bank has created its own analysis system. This system has an important support tool based on a software application, which automatically selects the operation by the type, frequency, amount, etc. These have a greater money laundering risk. Then, this information is presented to the Office for their analysis. The analysis is carried out by the “controllers” (controller / sub-directors) of the offices, so they can apply their direct knowledge regarding customers. Subsequently, the MLPCD verifies compliance leves and gives instructions to regulate the operations pending on analysis. This decentralized system is complemented by a technological development of centralized controls and its operated by the MLPCD and local prevention units who complete and validate the decentralized analysis, allowing for a global view of the customer and their operations. Furthermore, it facilitates remote monitoring of customers easing the decision-making process.
In Private Banking, Direct Banking, and Correspondent Banking the analysis is centralized. Technological tools are utilized to generate alerts from customer operational profiles and behavior patterns supported by the knowledge that officers and account managers have regarding their customers portfolio.Communication initiated by the Group regarding suspicious activities Cathedral Investment Bank has established procedures in all its units so that any suspicious operation be immediately communicated to the Internal Prevention Unit; including any operations related to such transactions that were to subsequently take place. Thus guaranteeing strictest confidentiality in that cycle. Affiliates Abroad At a minimum, a complete and specific review is conducted on an annual basis for all banks abroad that belong to the Group, as well as their affiliates, in order to review money laudering prevention procedures and their proper application. Furthermore, there is a permanent monitoring conducted remotely through submission of information and documentation to confirm compliance levels regarding actions that MLPCD, internal, and external auditors have recommended to be taken. Training In 2004, the Group’s units began training its professional staff on money laundering prevention. In 2005, the Group launched corporate training activities for offshore units and have since trained the entire workforce. Corporate retraining is conducted annually. The training covers the concept of money laundering as well as the most common processes utilized to conduct such activities. It also includes applicable laws and internal Legislations, organizational structure for prevention; it reviews practical cases, and discusses how employees should proceed and report any suspicious operations. Specific training has been developed and given to Private Banking and Correspondent Banking.
Finally, Internal Audit guarantees continuous policy compliance and effectiveness of Cathedral Investment Bank Prevention Money Laundering System. It also ensures that all its units know their customers, and that their activities are conducted in accordance with current ethical rules and legislation against money laundering. To this effect, the Internal Audit Division has programs reviews in all offices and in any other structures that have responsibility in prevention matters.