Trade Based Money Laundering.

Trade Based Money Laundering. 

As indicated by the International Money Laundering Information Bureau (IMLIB), government evasion is the third biggest industry worldwide after oil and cash. Trade Based Money Laundering (TBML) is one of the most established types of IRS evasion. It is likewise a standout amongst the most modern strategies for cleaning messy cash, and TBML warnings are among the hardest to identify. IRS evasion and wrongdoing are supplement to each other. One can't get by without the other. Wrongdoing creates messy cash and government evasion washes that soil to make it look clean.

Individuals dependably need a more secure place to keep their lawful or illicit profit at a secured and lower charge purview. In that strategy they use different complex channels and systems to bring their dark or white cash at a place where it is hard to follow it out, individual security is ensured, no political unsteadiness, lower or no assessment and more advantages.

As of late a gigantic hole of reports from a Panamanian law office, Mossack Fonseca, has tossed new light on how the rich and intense conceal their riches. They demonstrate how the organization has helped customers launder cash, avoid endorses and dodge assess. The greater part of that illicit cash comes through different instrument of TBML. Despite the fact that there are honest to goodness methods for utilizing charge sky, a large portion of what has been going on is about concealing the genuine proprietors of cash and abstaining from paying expense on the cash.

As per late insights the illicit stream of cash from Bangladeshi nationals are developing quickly where the pattern is diminishing in other South Asian nations. Greatest parcel of fare profit of Bangladesh come shape RMG trade. Here with a specific end goal to execute RMG trade arrange Back to back Letter of Credit (BBLC) worth a great many dollars are being issued regular against colossal number of fare LC and contracts. Here TBML is less demanding than whatever other remote exchange operations. So in Bangladesh the extent of TBML is more extensive than most different nations on the planet.

We realize that inside the extent of "exchange fund" a Financial Institution (FI) gives administrations, for example -

• Bank ensures 

• Documentary accumulations

 

• Financing under open record exchanges 

• Forfeiting and hazard investment 

• Import/send out advances 

• Packing advances 

• Pre-shipment advances 

• Structured exchange financing 

• Trust receipts 

• Warehouse financing Import/trade receipt marking down 

• Letters of credit ("L/C") 

• Financing for exchanges under L/Cs et cetera.

The TBML paper distributed by the Financial Action Task Force (FATF) has a rundown of warning markers that can be utilized proactively by bank exchange back divisions to battle TBML. These warnings incorporate the accompanying:

* Significant discrepancies between the description of the commodity on a bill of lading and the invoice.

• Significant discrepancies between the value of the commodity or goods reported on the invoice and the fair market value. For example, gold jewelry being exported at US$500 an ounce when the market rate is approximately US$950 per ounce.

• The type of commodity being shipped is not in line with the exporter or importer’s regular business activities, e.g., a manufacturer of toys exporting IT equipment. Cross linking “know your customer ” data and regular business alerts is an absolute requirement for an effective AML compliance program.

• The size of shipment appears inconsistent with the scale of the exporter or importer’s regular business activities. For example, a small textile exporter shipping a consignment worth US$50 million when its normal turnover is $1.5million.

• The goods are shipped through one or more jurisdictions or unconnected subsidiaries for no apparent economic reason.

• The transaction involves the receipt of cash (or other payments) from third party entities that have no apparent connection with the transaction. The transaction involves the use of front or shell companies.

As an essential element of trade related activities an FI should establish and maintain adequate and appropriate risk based controls to address TBML in respect of each kind of customer, business relationship, product and transaction.  Accordingly, they should also develop written policies and procedures to assess and mitigate Money Laundering/Terrorist Financing (ML/TF) risks arising from their trade related customers and activities.

Therefore,  KYC (Know your customer) related to trade based activities is the most important requirement for the FIs that may include: 

(a) business nature, such as major products, jurisdictions and markets;

(b) delivery / transportation mode for goods or services; 

(c) major suppliers and buyers; 

(d) products and services to be utilised from the FI; 

(e) anticipated account activities; 

(f) anticipated major methods and terms of payment and settlement; 

(g) internal customer risk assessment ratings by the FI; 

(h) any previous suspicious transaction reports filed with relevant authorities, to the extent possible bearing in mind legal and regulatory constraints, including the need to avoid the risk of tipping off; and 

(i) other information from the relationship manager or other relevant staff.

At present the Hong Kong Association of Banks (HKAB) has issued its eagerly awaited Guidance Paper on Combating Trade based Money Laundering (Guidance Paper). They recommended some key standards in detail to the FIs identifying with Trade Controls that are as per the following:

• Adopting a hazard based way to deal with their appraisal of dangers in connection to exchange related exercises, and in addition the definition and execution of Trade Controls.

• Performing client level or (for non-clients) exchange level hazard evaluation by making reference to the hazard based approach and, in light of the appraisal comes about, lead proper Customer Due Diligence (CDD) and continuous observing.

• Setting out the strategy for surveying, checking and alleviating exchange related exercises, including particular sorts of exchanges with respect to hazard levels.

• Taking into record important warning markers which are suitable having respect to their own particular business scope, size of operations and specific situations.

• Setting out clear warning survey and heightening strategies connecting with more elevated amounts of power for higher hazard figures and indicating the suspicious exchange reporting components including the money laundering reporting officer (MLRO).

• Making utilization of govern based exemption reports or discovery situations to the degree sensibly practicable.

• Ensuring clear division of parts and obligations and responsibility for identifying with basic capacities.

• Requiring choices identifying with exchange exchanges, work process methods and warnings to be reported suitably for review trail purposes in regards to records keeping norms.

KYE (Know your employee) is additionally a fundamental precautionary measure alongside KYC (Know your customer). The Cobrapost, an Indian news site through some sting operations discovered a few cases that highlight the contribution of workers in deceitful exchanges and as a rule allied with clients. In spite of the fact that there was no confirmation to show they did it for direct monetary profits, it proved that to pull in clients and assemble organizations to meet their objectives they won't dither to turn to any strategies. It appears the weight to accomplish the objective was the thought process behind their activity. This accordingly gets sharp center the requirement for careful keeps an eye on workers' certifications and legitimate screening of contender to keep the enlisting of undesirables.

An organization actualizing and keeping up a thorough inside control framework and with a good and moral esteem framework would, as a rule, keep any mutilation of standards and directions. On the off chance that saving money organizations don't go down that street, it is unavoidable that they will be more inclined to infringement and resultant reputational hazard. A decent inside control framework with a solid and hearty moral culture will minimize any harm.

Absence of most profound sense of being, ethical quality and ravenousness appear to be the underlying drivers for these issues. Insatiability has assumed control happiness and supplanted moral qualities. Everybody needs to get rich, driving individuals and organizations to enjoy exercises conflicting with authoritative qualities. Organizations ought to attempt to build up a culture with a moral and profound tone that echoes always. The more it is created, less will be the frequency of extortion and infringement.

Cloud Banking ; the another name of Future Banking.

Cloud Computing in Banking

General Information

The Cloud exhibits an open door for huge change in the way the matter of banking is done in the current or modern edge, however, concerns still remain. These concerns are to a great extent identified with security of data and information in the cloud and consistence. Banking organizations and the financial institutions in general has been moderately moderate in embracing the cloud. Their system has been to hold up and watch on how the cloud performs both from a security and heartiness of base perspective. While security concerns suggest the way that numerous banks have been moderate or about hesitant to utilize open cloud administrations in center saving money, open cloud can assume a greater part in a banks' level and back-office forms that does not straightforwardly include touchy information relating to clients.

What is driving the banks and other monetary organizations to receive the cloud is essentially the business weight to combine IT costs - truth be told. Gartner has guage that, by 2016, poor profit for value will drive more than 60% of banks worldwide to handle the greater part of their exchanges in the cloud. Taking signs from organizations in other industry verticals having the same requirement for information security, getting esteem from the cloud and beating rivalry at lesser costs, the managing an account and monetary administrations part is currently taking a gander at cloud in a radical new manner.

The cloud gives dexterity and adaptability to convey IT base dissimilar to the settled IT foundation resources and legacy frameworks that the banks are utilized to. With banks and other budgetary associations developing to handle the inflow of information, the server farms too need to end up more agile to deal with the inundation of information and the steady stream of data crosswise over differing situations. Additionally, the cloud empowers banks and monetary organizations to change their business forms and become naturally in new segments and topographies without causing colossal expenses for building up a physical nearness. It helps in making new markets and administrations for the bank's clients and addition an aggressive edge. The cloud additionally helps in recognizing and making critical open doors that helps banks to grow new plans of action that are client driven, consequently expanding development and benefit. Later on, open cloud use could likewise possibly stretch out to exercises, for example, charge card handling, check clearing, and examination on accumulated information.

Advantages of Cloud computing in Banking

Cloud computing can empower new plans of action for monetary organizations that can in a general sense shift aggressive scenes. The cloud assumes a key part in the bank's endeavors to change its business and working model. From a specialized perspective, the cloud naturally gathers, incorporates and arranges innovation assets to meet business objectives. In business terms, it disposes of the requirement for a physical framework to be available at every area from where the bank works, hence making it simpler for the bank to convey benefits quickly and at a lesser expense. The following is a table that epitomizes the advantages the cloud offers in various useful zones of a bank's operations :

Joint effort 

Empowering representatives crosswise over conveyed branches to get to exchanging and saving money frameworks through a security rich cloud infrastructure.

Analysis

Incorporating client information crosswise over saving money stages to empower close ongoing bits of knowledge.

Desktop and Devices 

Sending a private cloud to incorporate administration of desktops takes into account more noteworthy remote adaptability without yielding control, while empowering managing an account representatives to get to the applications and information they require.

Advancement and Testing 

Empowering a bank's advancement groups to rapidly and effectively make virtual situations therefore expanding the dexterity of improvement and testing.

Industry Applications

Empowering installment suppliers to institutionalize and modernize exchange handling.

Infrastructure Compute

Permitting ability to be apportioned, extended and reallocated proficiently gives banks adaptability and readiness while determining the issues of many sided quality and cost expands identified with scaling up customary system models to suit future development.

Business Services

Amplifying and fusing outsider administrations to extend the keeping money biological system to bolster client's ordinary purchasing and paying needs.

Manage Backup 

Going down a bank's basic business information to guarantee that in case of a fiasco a bank can skip back quickly and effortlessly.

Security

Authorizing dynamic security and endpoint administration to guarantee corporate administration and saving money IT strategies are kept up.

Infrastructure Storage

Giving adaptable stockpiling answers for guarantee that the constant requests of today's exchanging and investigation procedures are viable. Inferable from its upgraded registering force and limit, the cloud can store data and ongoing information about client inclinations that can help a bank in item and/or administration customization. Utilizing this put away data, the banks can customize client cooperation and offer their clients a one of a kind ordeal.

The cloud can likewise help banks to streamline operations. By adjusting business, operations and innovation, it empowers banks to drive higher development and net revenues and increment adaptability. The cloud additionally helps banks to scale up IT assets on-interest for growing its business operations. Banks can, in this way, react to client and business sector requests much speedier and quickly alter procedures, items and administrations to suit the evolving needs. This makes a domain of advancement, focused separation furthermore accelerates time to showcase.

Banks are putting forth Internet managing an account and moving the installment capacity to the cloud, just as a result of the considerable guarantee of cost reserve funds, effectiveness and spryness. By moving the installment capacity to cloud, banks can battle off the risk of disinter-mediation from telcos and other versatile installment administration suppliers. Installments are an immense wellspring of income for the banks and banks won't release it off that effortlessly. Moving installments to the cloud not just facilitates the weights on the bank from the perspective of dealing with an altogether IT setup for this additionally benefits their clients.

In future, Cloud advances alongside investigation, portable advances and enormous information will empower banks to open quality from existing information and procedures to address hazard administration and drive client engagement. By utilizing on standard improvement procedures, adaptability and coordinated effort empowered by the cloud, the banks will have the capacity to make new and creative item and administration offerings for their clients. The cloud design additionally offers adaptability in organization models, subsequently; empowering banks to end up more nimble and react to market changes should speedier and change their organizations.

To the extent security in the cloud is worried, as a rule, the security instruments set up by worldwide cloud suppliers may really be more grounded than those in numerous banks' inward frameworks. The eventual fate of saving money in the cloud holds extraordinary guarantee. As of now banks in developing markets are utilizing the cloud to come to the unbanked populace by offering portable and electronic managing an account administrations. Undoubtedly, potential outcomes of extension utilizing the cloud are perpetual for banks today.

Cloud Computing highly accepted by world wide banking.

Cloud computing 

Cloud computing is relied upon to be one of the quickest developing advancements in the coming years. Business applications will be the biggest business sector for cloud services spending, with a slow move from one reason to clouds based administrations particularly for general business applications like client relationship management (CRM) and Enterprise Resources Planning (ERP).

Banks are relied upon to enter the distributed computing field mindfully, with no single cloud administrations conveyance model being a silver projectile for best meeting their requesting business needs.

In July 2011, Capgemini and Microsoft reported a joint arrangement to offer quickened cloud administrations in 22 nations in light of Microsoft's cloud arrangement, Windows Azure. The arrangement will first concentrate on the UK, the Netherlands, the United States, Canada, France, Belgium, and Brazil. Capgemini brings arrangements particularly for money related administrations utilizing the Windows Azure stage which conveys very practical improvement and organization choices on an adaptable stage. Together, Capgemini and Microsoft have consented to deliver a future worldwide study into the issues of information quality, security, and sway in the cloud. Capgemini has additionally dedicated to:

* Distributed computing in Banking Train 1,500 designers and engineers all inclusive on the Windows Azure stage.

* Build up a committed seaward focal point of mastery through working up the Windows Azure Center of Excellence in Mumbai, India .

* Relocate chose answers for the Windows Azure stage .

* Effectively drive biological communities of outsider suppliers of Windows Azure center of  arrangements in focused divisions.

Cloud computing can offer money related establishments various favorable circumstances, including: 

1.Cost reserve funds 

2.Usage-based charging 

3.Business congruity 

4.Business spryness

 

5.Green IT.

Be that as it may, before moving to the cloud, banks must consider issues around information secrecy, security, administrative consistence, interoperability of models, and nature of administrations.

CAUSES of cloud computing for Bank

Distributed computing can help monetary establishments enhance execution in various ways.

1. Taken a toll Savings and Usages based Billing

With distributed computing, money related establishments can transform a huge in advance capital consumption into a littler, continuous operational expense. There is no requirement for substantial interests in new equipment and programming. What's more, the one of a kind nature of distributed computing permits budgetary establishments to pick and pick the administrations required on a compensation as-you-go basis.

2. Business Continuity

With distributed computing, the supplier is in charge of dealing with the innovation. Monetary firms can pick up a more elevated amount of information assurance, adaptation to internal failure, and debacle recuperation. Distributed computing additionally gives an abnormal state of repetition and move down at lower cost than customary oversaw arrangements.

3. Business Agility and Focus

The adaptability of cloud based working models gives budgetary foundations a chance to encounter shorter advancement cycles for new items. This backings a quicker and more proficient reaction to the requirements of saving money clients. Since the cloud is accessible on-interest, less foundation speculations are required, sparing starting set-up time. Distributed computing likewise permits new item improvement to advance without capital venture. Distributed computing likewise permits organizations to move non-basic administrations to the cloud, including programming patches, upkeep, and other processing issues. Thus, firms can concentrate more on the matter of money related administrations, not IT.

4. Green IT 

Organizations can utilize distributed computing to exchange their administrations to a virtual domain that diminishes the vitality utilization and carbon impression that originates from setting up a physical framework. It additionally prompts more effective use of processing force and less sit still time.

CHALLENGES

At the point when a bank moves into cloud computing, there are two essential difficulties that must be tended to:

Security. 

The classification and security of money related and individual information and mission based applications is central. Banks can't manage the cost of the danger of a security branch.

Administrative and consistence. 

Numerous keeping money controllers require that monetary information for banking clients stay in their home country. Certain consistence directions require that information not be intermixed with other information, for example, on shared servers or databases. Therefore, banks must have a reasonable comprehension of where their information lives in the cloud.

Money related foundations must choose the right administration, organization, and working models to address security and consistence concerns. In the underlying periods of distributed computing reception, it is normal that banks will possess and work the cloud themselves with administration suppliers taking expanding proprietorship and control of the cloud framework as distributed computing develops and more thorough controls get to be accessible.

ACHIEVEMENTS .

At the point when considering cloud answers for money related administrations, banks ought to accomplice to pick up cloud ability. Cloud administrations suppliers ought to have:

* An obviously characterized cloud technique .

* Demonstrable degree of profitability.

* Proven cloud administration conveyance capacities.

Capgemini has experience prompting huge money related organizations on distributed computing. We've created four key achievement calculates that banks ought to consider when propelling cloud activities:

1. Plainly characterize the ROI for cloud based activities.

Banks ought to be careful about making huge interests in distributed computing until unmistakable advantages are accessible. As an initial step, cloud suppliers ought to clarify the expenses and ramifications of relocating existing keeping money applications and base to the cloud.

2. Pick administration suppliers with demonstrated ability in cloud administrations administration. 

Banks ought to utilize a guide to best oversee cloud administrations conveyance programs. Administration suppliers who have put resources into pilot undertakings will have certifiable experience and business cases for distributed computing activities. Banks can begin little with less basic applications, for example, CRM and after that proceed onward to center business applications.

3. Sign outsourcing gets that utilization pay-per-use cloud conveyance models. 

For cloud activities, banks need service level agreements (SLAs) that connection charging to reliable framework execution.

4.Understand information secrecy and administrative necessities. 

Banks may need to keep touchy information inside firewalls to satisfy nearby controls and customer classification prerequisites. In this manner, private cloud based working models are presently a superior first decision than open or half breed mists. As open mists pick up trust and certainty among shoppers, banks can continuously move to these models. Activities, for example, the Cloud Security Alliance -1 are taking a gander at these worries. In any case, to best exploit distributed computing, banks must have an unmistakable comprehension of security and administrative issues to settle on educated choices.

CONCLUSION

At the point when planning cloud computing activities soon, money related organizations ought to pick administration and conveyance models that best match prerequisites for operational adaptability, cost reserve funds, and pay as you use models. Capgemini trusts banks ought to receive a progressive developmental methodology towards distributed computing administrations, assessing every task in view of the sort of uses and nature of the information. Lower hazard tasks may incorporate client relationship administration and endeavor content administration. Higher danger tasks will include center business useful frameworks, for example, riches administration or center saving money. Longer term, Capgemini expects banks will have an application portfolio blend of on-reason and cloud-based administrations conveyed over a mix of private, half and half, and open cloud-based arrangement models with the offer of cloud administrations step by step expanding in the administration blend. Private mists are relied upon to progressively turn into the arrangement model for cloud administrations among banks, giving money related organizations full control through proprietorship and operations of their cloud frameworks.