Oversight of the Board of Directors – Foreign Bank

Perspective

Osman Morad Chief Executive Officer

Standard Chartered Bank Malaysia Berhad

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• AML Governance: Policies & Procedures

• AML Governance: Oversight of the Board

• AML Governance: Roles and

Responsibilities

• AML Governance: Risk Management and

Assurance

INTRODUCTION

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FATF

UNSCR

EU

Directives

POCA 2002

Terrorism Act 2000

Money Laundering Regulations 2003

Anti-Terrorism, Crime & Security Act 2001

Bo

ard

of

Dir

ect

ors

re

spo

nsi

ble

for

the

go

vern

ance

of

the

co

mp

any

CMLPO

Training & Awareness Procedures

AML Governance Procedures

AMLATFA

Various national laws

Sanctions Procedures

Suspicious Activity Reporting

Transactions Monitoring Procedures

Customer Due Diligence Procedures

Names Screening Procedures

POLICIES & PROCEDURES

4

AML/CTF in SCB

Group Policies & Procedures Group Policies & Procedures

Business

Procedures

Business Policies &

Procedures

Internal Programme

Systems

Local Regulations

POLICIES & PROCEDURES

• Our aim: Minimize risk of Standard Chartered

Bank Malaysia Berhad being used by money

launderers and terrorist financiers.

• Our application: Throughout Bank, all staff,

all business activities.

POLICIES & PROCEDURES

BOARD OF DIRECTORS

AUDIT COMMITTEE (AC)

NOMINATION COMMITTEE

(NC)

EXECUTIVE COMMITTEE

(EXCO)

BOARD RISK COMMITTEE

(BRC)

Asset & Liability Committee

(ALCO)

Country Operational Risk Committee

(CORC)

Group Special Asset Management Committee

(GSAM)

Stress Testing Committee

(STC)

Early Alert Committee

(EAC)

Derivatives Committee

Model Assessment Committee

(MAC)

Risk Management Committee

(RMC)

BRC provides oversight on risk management

Updated: As of August 2011

OVERSIGHT OF THE BOARD

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Country CEO

OVERVIEW

Country Head of Compliance

Country Heads of

Business

CMLPO BMLPO

REPORTING STRUCTURE

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COUNTRY CEO’s : Responsibilities

• Oversee Country Business Head’s AML responsibilities.

• Receive reports from Businesses and CMLPO.

• Make “reasonable enquiries” to ensure that AML systems and controls in-country are adequate.

ROLES AND RESPONSIBLITIES

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COUNTRY BUSINESS HEADS : Responsibilities

• Implement global business AML procedures locally.

• Appoint BMLPOs.

• Ensure staff are provided with a point of contact regarding CDD requirements.

• Make business AML risk management information available to relevant AML governance committees.

• Ensure staff training in accordance with Training and Awareness procedures.

ROLES AND RESPONSIBLITIES

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CMLPO : Responsibilities • Oversee overall effectiveness of AML regime

in-country. • Report regularly to senior management and

Country Operational Risk Committee (CORC) on control issues.

• Ensure Group, Business AML procedures are applied in a manner consistent with local law (e.g. exceptions).

• Update business on local legal developments. • Monitor changes to country ML risk. • Monitor effectiveness of suspicion reporting in-

country. • Manage country SAR process (including

business review of SAR customers).

ROLES AND RESPONSIBLITIES

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Board of Directors:

• CMLPOs and BMLPOs produce an annual country AML risk assessment for consideration by Country Operational Risk Committee (CORC).

• AML risk assessment will set out the risk profile of the Bank’s customers, products, services and geographical areas.

• AML risk assessment will be tabled to the Board of Directors for deliberation.

ROLES AND RESPONSIBLITIES

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Board of Director will also deliberate on:

• Whether all staff trained in accordance with

Group & Business Training and Awareness

procedures.

• AML risks identified through periodic

assessments.

• Risks from change such as new products.

• Risks from control lapses.

• Risks identified from root cause analysis of

AML events.

• Risks from external events.

ROLES AND RESPONSIBLITIES

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Q&A