Barclays 2007 Annual Report Download - page 113

1
Business review
Risk management
Financial crime risk management
Barclays PLC Annual Report 2007 111
Financial crime risk management
Barclays adopts an integrated approach to financial
crime risk management. In line with the five-step risk
management model, Group Financial Crime Management
(GFCM) has the responsibility to direct, assess, control,
report and manage/challenge financial crime risks, which
are structured into three strands: anti-money laundering
(AML) and sanctions; fraud; and security.
Each business unit within Barclays develops its own
capability to tackle financial crime, providing regular
reporting on performance, incidents and the latest trends
impacting business. This integrated model allows us to:
– Develop a clear profile of financial crime risk across
the Group.
– Share intelligence, adopt common standards and
respond promptly to emerging issues.
– Drive forward law enforcement and other Government
initiatives.
– Benchmark ourselves against other financial institutions
facing similar challenges.
Anti-money laundering and sanctions risk
The Group assesses the implications of all emerging legal and regulatory
requirements that impact it and establishes policies and procedures in
respect of AML, terrorist financing and sanctions, updating these regularly.
It operates an AML assurance programme to ensure a system of effective
controls to comply with the overarching policies, providing technical
guidance and support to each business unit.
GFCM collates and oversees the preparation of Group-wide management
information on AML and sanctions. This information includes risk
indicators, such as volumes of suspicious activity reports (SARs) and is
supplemented by trend analysis, which highlights high-risk or emerging
issues so that prompt action can be taken to address them.
Three committees (the Sanctions Cross Cluster Operational Review
Board, the AML Steering Committee and the Policy Review Forum) review
business performance, share intelligence, develop and agree controls, and
discuss emerging themes and the implementation status of policies and
procedures.
All businesses contribute towards the Group Money Laundering
Reporting Officers Annual Report, which is provided to Group Senior
Executive Management and is available to the FSA. Together with regular
management information and conformance testing, this report updates
senior management with evidence that the Group’s money laundering
and terrorist financing risks are being appropriately, proportionally and
effectively managed.
During 2007, the Group augmented its AML capability, implementing
third EU money laundering directive, with its guiding principle of a risk-
based approach. For AML, this must be proportionate to the perceived
risks and threats, including terrorist financing.
A new Group AML Policy, launched in December 2007 and encapsulating
the risk-based approach, has further improved the Group’s customer
due diligence procedures and standards, transaction monitoring and staff
training and awareness.
The Group also implemented EU Regulation 1781/2006, which aims to
ensure thorough and robust audit trails concerning electronic transfers.
This assists the Group in monitoring its AML and terrorist financing and
improves the information available to law enforcement authorities.
Barclays continues to upgrade its sanctions screening capabilities, in line
with best international practice and changing regulatory requirements.
The Group has invested substantial resources to further enhance its
monitoring capabilities in this area and will continue to do so.
In 2008, the Group will review procedures to ensure compliance with
forthcoming legislation concerning the Single European Payments Area
(SEPA). Should the US enact current draft legislation outlawing the use of
the international payments and clearing systems for perceived illegal US
internet gaming transactions, further enhancements to payments activity
monitoring will follow.