The new era of anti-financial crime compliance
Marios M. Skandalis · Journal of financial compliance. · 2017
Following the Panama Papers and to a lesser extent the Bahama Papers scandals, a number of persons, physical and legal, have been revealed as potentially exposed in corruption and/or other forms of money laundering activities. This scandal was a reminder of the need for an enhanced antifinancial crime framework encompassing enhanced due diligence, identification of beneficial ownership, assessment of third party risks and hyper-analytic tools and systems to enable effective risk monitoring in all financial institutions. This paper presents the current measures imposed by the European Union regarding customer due diligence, beneficial ownership, reliance on third parties, continuous monitoring of accounts and transactions, proposed amendments under consideration aiming at further strengthening and enhancing the existing framework and the view of the author that a cultural transformation of Financial Institutions and the incorporation of anti-financial crime activity into their daily operations will successfully apply the lessons learned from the Panama Papers. An effective anti-financial crime function is no longer a checklist of regulatory obligations or list of rigid rules and procedures but rather a corporate culture built on ethos. Its effectiveness is measured not in terms of the degree of conformity to the vast amount of regulatory frameworks in place but rather on the degree of integrity and clarity that corporations adopt in a practical sense.