Creditbank SAL AML/CFT guideline summary
Both Money Laundering and Financing of Terrorism are a threat to the reputation of the Lebanese banking sector and the country’s overall financial market; they also affect negatively the growth of the Lebanese economy. Combating money laundering and terrorist financing is, therefore, a key element in promoting a strong economic sector and sound economic and financial growth.
The Lebanese government has passed legislation designed to prevent money laundering and to combat terrorism. This legislation, together with regulations, rules and industry guidance forms the cornerstone of Anti-Money Laundering and the Combating the Financing of Terrorism (“AML/CFT”) obligations for Lebanese banks and outline the offences and penalties for failing to comply.
The development and implementation of effective customer due diligence systems and monitoring mechanisms are essential to help combat money laundering and the financing of terrorism. Creditbank s.a.l. (“the Bank”) has adopted an AML /CFT guideline that sets out its expectations in relation to the minimum standards for AML/CFT practices by identifying and taking appropriate actions to mitigate these vulnerabilities, and helping to control the risks associated with money laundering (“ML”) and financing of terrorism (“FT”).
In line with local legislation and regulations and in compliance with international requirements and best practices in particular the Basel Committee on Banking Supervision (BCBS), the Bank’s board has established committees with audit and risk oversight responsibilities. This does not relieve the overall board of its responsibilities, but rather allows for a more coordinated and focused approach to risk oversight.
The AML /CFT Committee reviews all policies and procedures in compliance with local and international ML/FT laws. Responsibilities of this Committee are defined in the following local legal and regulatory provisions:
This Committee’s responsibility is to prevent the ML operations in the Bank and to control transactions processing and ensure that adequate measures are adopted and implemented. Also, it falls under the Committee’s role and responsibilities:
- Article 5 of Law number 318 dated April 20, 2001
- Article 10 and 11 of Basic Decision No. 7818 of May 18, 2001
- BDL Intermediary decision number 10725 of May 21, 2011 amending the above mentioned Basic Decision No. 7818
The Bank conducts its internal ML and FT risk assessments (for its customers, products and services, transactions channels and geographic areas) with the purpose to develop its own policies and procedures, in order to identify, assess, manage and mitigate related risks on on-going basis. In this regard, the major consideration for the Bank is a matrix developed by the Bank as low, medium and high. This matrix enables the Bank to decide which customer qualifies for simplified due diligence or enhanced due diligence called the “Quantification of Risk through Risk Matrix” enabling the categorization of risk levels. In line with its internal risk assessment, the Bank has adopted a program, the AML reporter software which quantifies the risk categories as indicated here above and enables the Bank to continuously and efficiently monitor its customers.
- To prepare a procedure manual for implementing the provisions of the Law on Fighting Money Laundering and the provisions of these regulations.
- To prepare a form for client recognition “Know Your Customer” (“KYC”) to control financial and banking operations in order to avoid involvement in money laundering operations. This form should include the basic information to check the customer identity, specially determine the beneficial right owner, the purpose of the accounts opening and the source of funds.
- To ascertain the proper implementation and effectiveness of the procedures and regulations on fighting money laundering operations and financing terrorism.
- To review periodically the above mentioned procedures and regulations, and develop them in time with up-to-date methods of fighting money laundering.
- To prepare a training program on the methods of controlling financial and banking operations, in accordance with the control procedure manual, and with other legal and regulatory texts in force.
- To review the reports submitted by the AML/CFT Compliance Unit and the “Internal Audit Department,” the implemented procedures and regulations, the unusual or suspicious operations and high-risk accounts, regarding cash deposit and withdrawal operations, transfer operations, and the link between these operations and economic activities.
- To comment on the reports submitted by the ABM and submit comments to the Board of Directors.
- To monitor, when the operation exceeds $ 10,000 dollars or its equivalent, the adequacy of exemption procedures whereby some well-known customers are exempted from filling the cash transaction slip, and also determine the exemption ceiling and modify it according to developments in the customer’s economic situation.
- To review the recommendations listed in the reports of the Special Investigation Commission and make sure they are properly and timely implemented.
Reflective of the risk profiling, the Bank applies reasonable measures in its internal policies and procedures, including customer due diligence, to address the different risks presented by each category of customer and type of products and services.
The AML/CFT Unit is responsible to ensure appropriate monitoring on customer’s transactions and will report suspicious transactions to the AML/CFT Committee with adequate recommendations.
With regards to its international relations, Creditbank S.A.L. establishes multiple correspondent relationships throughout the world in order to engage in international financial transactions where it does not have a physical presence. The Bank provides its correspondent banks with any document/information required for due diligence exercise. Such information includes filling-in AML Questionnaire, bank's ownership, shareholders, directors, etc., in addition to information about specific transactions carried out with correspondent banks.
Finally, and In line with the BDL circular No. 83, the Bank ensures that appropriate personnel/staff are trained in applicable aspects of the AML and compliance program. Said training includes regulatory requirements and the Bank’s internal AML/compliance policies, procedures, and processes. It is tailored to the person’s specific responsibilities. Specifically, compliance officers in all the bank’s branches receive periodic training that is relevant and appropriate, given changes to regulatory requirements as well as the activities and overall AML/Compliance risk profile of the Bank.