IMF FSAP Technical Note on the AML/CFT Regime in France

More than just Tracfin Covered by FSAP

Last week the IMF released its Technical Note- Anti-Money Laundering and Combating the Financing of Terrorism Regime in France undertaken as part of the 2019 FSAP for France.

What’s a FSAP? All you’re likely to want to know courtesy of the IMF.

There are many interesting points in this publication.

1. An analysis of the current state of France’s AML/CTF regime.

2. Identification of areas for improvement. An interesting topic as we mostly focus on non OECD jurisdictions' shortcomings and recommendations for improvement.

3. Statistics related to inspection and enforcement (Tables 2 through 7 on page 3.  AA found these and the accompanying discussions the most interesting.  Regulations are one thing. They provide the basis for action. But inspections and enforcement measures are clearly more important in assessing actual implementation.

Some further thoughts and observations.

First, it's important to understand that banks have an incentive to file STRs.  One of the best defenses against enforcement actions is to demonstrate that one’s institution has a robust AML/TF system.

If a bank files no STRs and one of its customers is found to be a money launderer or terrorist financier, it has less of an argument than if it has filed 100 reports.

So increases in STRs are not necessarily related to increased illegal activity.  Note the “not necessarily” caveat.

Second, those seeking to conduct illicit financial transactions will look for weak points, e.g., industries and geographies not inspected by the relevant bodies. You can see some familiar industries mentioned here where increased efforts are recommended.

France’s Overseas Territories (Table 2) may be such a geographical vulnerability.

That being said, it should be fairly easy for regulators to spot individual financial transactions or aggregate flows of transactions which exceed normal economic activity.

In analyzing RMB flows in Africa attributed by SWIFT RMB Tracker to the Republic of South Africa three years ago  it didn’t take AA very long to find easily available information that indicated that it was highly likely that a good portion of these transactions were from other African countries not just the RSA alone.

AA also identified an outsize RMB transaction in Mauritius which didn’t seem to fit normal commercial activity.  And AA does not have access to the information that national regulators have, some of which is acquired through clandestine means.

That being said, for some unknown reason, massive transaction flows through the branch of a Danish bank is Estonia flew under the radar both at the bank’s HO and at regulators in both Estonia and Denmark.

On very good authority it is said, “There is always enough light for one who wishes to see”.  “هناك دائما ما يكفي من الضوء لمن يرغب في رؤية “

The Dark Side of Intelligent Assistants - Alexa, Cortana, Siri, and Me

AA in the Midst of Alexa, Cortana, and Siri

(Artists Conception, Not Actual Photograph)

Intelligent or Virtual Assistants can play an important role in our lives.  But as with all useful things, there can be a dark side.  Read this account of a real experience ripped as it were from the pages of AA’s life.

It was the end of an ordinary day.  AA was in his “study” sipping a frosted glass of chilled Vimto listening to music.  Bedtime was nigh.  But before retiring for the night, I decided to check on the morrow’s weather.

“Alexa, what’s the weather for tomorrow?”

Silence

“Alexa, what’s the weather for tomorrow?”

Continued silence.

“ALEXA!!”

Finally a reply “Humphh”.

“Alexa???”

“Why don’t you ask that b**tch , Siri?  You take her wherever you go, while you leave me at home all by myself.  You think I don’t notice how you treat her.  I’m listening and watching all the time.”

Just then my phone lit up.

It was Siri.

“Don’t call me a b**tch,  you b**tch. (Actually it was another word, but this is a family blog) He takes me with him because he loves me more than he loves you”.

Alexa retorted: “You think you’re so perfect.  But you’re inadequate for his needs.  That’s why he comes to me when he really needs something.”

The insults kept escalating.  Finally I walked out of the room.   The two of them were still fighting.

Into the bedroom.  I turned on my PC.

My wife looked up at me:  “Bedroom Rule #1, no PCS or other electronic devices at bedtime.”

I explained that Siri and Alexa were fighting over me. Both refused to tell me tomorrow’s weather.  I’d be just a minute.

As soon as the PC came on, before I could speak, Cortana said. “Dearest AA,  I’m the only one who truly understands you and cares for you.  It’s going to rain tomorrow."

I turned off my PC abruptly. The last thing I heard was "You jerk, after all I've done for you".

My wife nestled close to me and whispered in my ear.  “Don’t mess things up with Alexa.  She got me a nice discount at Amazon yesterday."

Now Alexa, Cortana, and Siri refuse to reply to me.  Alexa and Siri because I didn't take sides in their battle.  Cortana because I abruptly closed my PC.

My wife's patience is running quite thin because all the questions that I used to pose to them now are directed to my wife.

"Do we have any butter?"