Counter Terrorism Financing (CTF/CFT): What you need to know

TERRORISM FINANCING – What are the danger signals?

CFTTerrorist and insurgency groups and their operations feature in the daily headlines across the globe. A question not posed so often in the media is how do these groups get access to funding to conduct attacks, to operate, buy equipment and arms, recruit and pay for their day-to-day activities? Countering the Financing of Terrorism (CFT/CTF) is a global issue, which concerns governments, regulatory authorities, enforcement agencies and the general public who end up the victims of the activities of these groups.

For compliance professionals one of the key elements to stifling the flow of funds to these groups is knowing who they are really doing business with.  Be informed of the key trends, who are the major players, the financiers, the associates, the networks, regions most at risk, and the red flags which can indicate where the hidden risk may lie.

Avoiding sanctions breaches, AML/CFT violations, and heavy monetary penalties, not to mention subsequent bad publicity for your organization and brand, can result in a lack of trust from the public, and clients. To be able to remain compliant should be a priority for regulated organizations.

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This month, David Craig from Thomson Reuters, covered the issue of terrorist activity in his blog:

“Illicit trade and related terrorist or criminal activity is not something that just operates in the shadows. Illicit funds reenter the world through routine activities like real estate investments, the sale of high value goods like antiquities and art or financial transactions, not to mention more nefarious activities like wildlife crime or human trafficking. No doubt, financial institutions are, in fact, in a unique position to use their data to idenfity anomalies in financial transactions which may shine a light in illicit activity.”

Key Terrorism Trends in 2013-2014This month’s resource rich Knowledge Bank is packed with information and helpful guides, including a whitepaper dedicated to the subject of charities and terrorism funding, infographics, Expert Talk articles and much more to assist you in learning about counter terrorism and the risks it poses for business, including:

  • The different funding methods used by terrorist and insurgents groups
  • The techniques they use to avoid detection
  • What behaviors compliance professionals should be on the lookout for to prevent terror finance gaining access to the global financial system.
  • The roles NPOs may play
  • Why it is a misconception that financial crime and terrorist activity is predominantly the problem of failed or economically poor countries and states

Thomson Reuters KYC risk intelligence database, World-Check, has had a specialist research unit dedicated to identifying terrorism and insurgency networks and their financiers and associates. World-Check research has been recognized by Interpol for services to law enforcement and the fight against crime. Learn more about the unit and how it operates in the Knowledge Bank.

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Internal Audit Solution Buyer’s Guide

A Time-Saving Guide to Selecting the Right Internal Audit Solution

5Selecting a new internal audit management tool is one of the most important decisions a chief audit executive has to make during the course of his career – the right tool can help lay the foundations for future success, while the wrong tool can quickly turn into a daily reminder of a decision gone wrong. When it comes to making the right decision, haste makes waste: It is better to spend the additional time at the beginning making sure requirements are properly captured, documented and prioritized, than to try and slice the daily loaf of audit bread with a spoon.

The purchase of an internal audit management system is a critical initiative for the future success of any organization, and involves complicated, company-specific considerations. As such, the onus is on the buyer to check and test the quality and suitability of the internal audit software before a purchase is made.

The “Internal Audit Solution Buyer’s Guide” can facilitate this process. It is an important tool to help streamline the vendor evaluation process and enable organizations to objectively grade prospective audit solutions and the operational impact they will have on the organization, assuring the decision is objective, transparent and well-informed.

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The Anatomy of Enhanced Due Diligence

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In the context of the ongoing Ukraine crisis and the tightening of sanctions against Russian and Ukrainian entities, an intelligence layer detecting various, surprisingly timely shifts in the shareholding structure of such entities in a bid to escape sanctions can represent invaluable information. Furthermore, the complex news landscape around the bribery scandal involving one of the largest pharmaceutical companies now features the case of a business risk advisory firm with alleged knowledge of China, whose CEO is now standing trial due to the use of unethical investigation methods.

Background checks are vital to understand the spectrum of potential threats. However, gathering the extensive range of information needed for effective due diligence is an arduous, time consuming task, especially where the business relationship involves other countries or where relevant information is in a language not easily understood by the researcher.

Examples of when to conduct enhanced due diligence:

  • Before a merger, acquisition or joint venture
  • When on-boarding high net worth or high profile clients
  • When automated risk screening reveals risk
  • Where geopolitical risk analysis flags a transaction or individual as linked to a high risk country
  • As a key component of a comprehensive compliance program
  • To enhance an existing compliance process, where resources are stretched

It is vital to enlist a due diligence provider who not only employs a robust and thorough methodology but also one that is ethical.

How can Thomson Reuters Accelus help?

IntegraScreen Enhanced Due Diligence Reports provide structured, comprehensive background checks on an organization, its owners and its operating and litigation history, as well as key management, decision makers and beneficial owners, providing insight on their background, track records, competencies, potential conflicts of interest and political and criminal links.

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Anatomy of Enhanced Due DiligenceInfographic: Lifecycle of an IntegraScreen Report

Our complex due diligence report building process places particular emphasis on sourcing the right information directly and in an ethical manner – language and accessibility being no object under this condition – maintaining a consistency of methodology and quality, as well as absolute confidentiality.

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