Barclays 2008 Annual Report Download - page 135

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Business review
Barclays PLC Annual Report 2008 133
Risk management
Financial crime risk management
Anti-money laundering and sanctions risk
Financial crime risk is a category of operational risk. Itarises from the risk
that the Group might fail to comply with financial crime legislation and
industry laws on anti-money laundering or might suffer losses as a result
of internal or external fraud,or might fail to ensure the security of
personnel,physical premises and the Group’sassets.
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 and operates an AML Risk
control framework and associated policies and minimum standards in
respect of AML, terrorist financing, sanctions and bribery and corruption.
The Group operates an AML oversight programme to ensure a system
of effective controls comply with the overarching policies, providing
technical guidance and support to each business unit. This is monitored
via conformance testing both at the business units and the Group level. In
2008, Barclays Internal Audit completed a combined global audit of Know
Your Customer, AML and Sanctions procedures.
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 AML Steering Committee, the Sanctions
Cross-Cluster Operational Review Board 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 2008, the Group augmented its sanctions capability by issuing
a revised Sanctions Policy. This enhances certain areas of control such as
screening.
Barclays continues to upgrade its sanctions screening capabilities, in
line with best international practice and changing regulatory requirements
and has invested substantial resources to further enhance its monitoring
capabilities in this area and will continue to do so.
Representatives of the Group attend industry fora such as the
Wolfsberg Group, the British Bankers Association’s Money Laundering
Policy Group (MLPG) and the Money Laundering Advisory Panel (MLAP),
to ensure that Barclays is influential in discussing and interpreting new
legislation.
In 2008, the Group continued to follow developments in the Single
European Payments Area (SEPA), with a view to developing its payments
systems accordingly.