How bankers identify dirty money launderers among their clients

Don’t be nervous, don’t be overly curious, and be ready to answer any question of the Bank – that’s what you need now to withdraw money from your account, pay for a contract, or perform any other operation.

But compliance with all these rules does not guarantee that, for example, the account will not be blocked, and your name will not be added to the “black” list of undesirable clients. Why have bankers become so suspicious, and how to adapt to the new conditions for working with banks?

Banks and their agents

The new law on financial intelligence begins to overgrown with regulations. The National Bank has already told the wards how to adjust internal financial monitoring systems to the new requirements, identify clients and determine their risk level.

And, which caused a special resonance, spelled out in detail the signs by which the Bank can catch and stop suspicious financial transactions. The relevant regulation of the regulator was officially published on May 21.

How will this change the lives of the Bank customers and what should we prepare for?

Let’s start with the fact that the bankers are finally granted the status of fiscal helpers. In any case, as far as business representatives are concerned. In order to make sure that the customer is not a pacifier company, the bank can also request documents confirming the payment of taxes, as well as the fact that the employees are officially employed, among other documents showing the “live” business activity (the company itself and its contractors).

Clients who do not like them at the first sight seem to have a very long and obviously not always successful way of verification and identification. After all, after such a client at the request of the bank provides all possible documents proving his identity, bankers can move on to the next stage.

Namely, according to the recommendation of the NBU, they will have to make sure that “the client (client’s representative) is not an impostor, but really is the person that he called himself.”

What will happen at this stage is unknown. Perhaps the bankers will require an expert opinion on the authenticity of the documents provided, or something like that.

By the way, bankers can entrust the procedure of identification of their clients and third-party structures. Bank agents can be foreign and Ukrainian legal entities, private individuals or individuals. Moreover, there may be several such agents.

Suspicious FOPs

Special attention should be paid to the recommendations of the NBU on what criteria to assess the client’s risk level.

Commercial or personal activity of the client is one of the basic criteria. Bankers will also pay special attention to representatives of very “peaceful” professions. Including those whose type of activity:

• providing legal, consulting, accounting services;
• trade in real estate, luxury goods, antiques, works of art;
• intermediary services for foreign currency trading (for example, Forex dealers);
• providing services that are difficult to document (for example, advertising, marketing, consulting services, market research services, development and maintenance of IT solutions);
• activities related to virtual assets.

Thus, the vast majority of FOPs, as well as new business entities, will automatically become doubtful. Because one of the criteria of risk – no more than six months from the date of the state registration of the legal entity.

The main thing – no emotions

Very scrupulously, the National Bank prescribed the signs of financial transactions, the presence of which bankers should cause increased attention. Moreover, bankers will pay attention not only to the transaction itself, but also to the customer’s behavior.

For example, the ideal Bank client should be able to:

• clearly explain what he does, the essence of his business;
• know your contractors well;
• be prepared to provide any paper required by the Bank;
• always be in touch with the Bank (current phone number, specified address and e-mail).

And, by the way, no business development is better. After all, a significant increase in account turnover will also be immediately under suspicion.

The reason for the beginning of serious problems can be, for example, poor service in the Bank, which will cause irritation. Or, for example, excessive talkativeness and curiosity.

From the 71 indicators of suspicious financial transactions prescribed by the National Bank, the Ministry of Finance chose the 10 strangest:

The client (the client’s representative) is nervous for no apparent reason or exhibits atypical behavior.

The client demonstrates an unusual interest in the requirements of “anti-money laundering” legislation.

The client (the client’s representative) insists on the urgency of the financial transaction, showing nervous behavior for no apparent reason.

Financial transactions on the account of an individual do not correspond to the risk profile of the client (in particular, age, profession, income).

Performing several financial transactions by a client during one day in one branch, but with an obvious attempt to be serviced by different Bank employees.

There have been significant changes in the volume of financial transactions on the accounts.

Regular receipt of funds from abroad or transfer of funds abroad, if the purpose of such transfers is not obvious or the combination of such financial transactions is unusual.

The declared and actual volumes of operations of the retailer, the amounts of individual transactions do not correspond to the usual practice of competitors or information received by employees of the bank after a visit to this outlet.

Conducting large-scale financial transactions with cash or conducting a significant number of operations using card accounts.

Cash withdrawals in significant amounts from a current account for which no transactions have been made for a long time (at least six months), or from an account to which a large amount has recently been credited from abroad.

The consequences can be very unpleasant: a suspicious transaction will be stopped, the funds in the account will be blocked until the circumstances are clarified. In the worst case, the account will be closed, and its owner will be blacklisted.

This means that a person or company will become unwanted customers not only for the bank where the incident occurred, but also for other financial institutions. About large operations (from 400 thousand UAH), which the Bank found criminal, learns Gosfinmonitoring. And then – check of financial intelligence and transfer of business to militiamen.

Where did the new rules come from?

The problem is that the new Finmon rules will greatly complicate the lives of ordinary customers of the bank. But the main task – to prevent the laundering of criminal proceeds and the financing of terrorism is unlikely to be solved.

The fact that our officials simply wrote off the criteria of suspicion from others is also recognized in the national Bank.

“Most of these risk indicators can be found in international financial monitoring practices (European Banking Authority’s Guide to Risk Factors, Typology and FATF Guidelines), as well as in regulations of other countries (Canada, USA, UK, Australia, Georgia, Sweden , Singapore) “, – say in the press service of the NBU.

How to live by the new rules

The appearance of the National Bank’s recommendations does not mean that the banks have already taken cover. According to the regulator, his wards have time to implement the new requirements of Finmon – until the end of the year.

In addition, our law on financial monitoring gives the bank the right to determine the criteria of suspicion.

“What unites domestic and foreign banks is an independent voluntaristic definition of” economic expediency. ” Here’s how a bank clerk can understand the logic of a tens of millions of client business from the height of his salary? And where is his degree of responsibility? The client can prove his rightness (if, for example, his account has been blocked) only in court, where forensic experts with the necessary qualifications can be involved, ”says KAC Group Managing Partner Volodymyr Harkusha.

But given the peculiarities of our judicial system, it will be long, and, most importantly, not the fact that it is effective.

The worst thing is that banks can use financial monitoring for their own gain. Volodymyr Harkusha told the Ministry of Finance how, for example, some Latvian banks did.

For contrived reasons, they blocked accounts for millions of euros at the sole discretion of the compliance manager. Clients flooded the bank with documents, contracts, explanatory notes, which, judging by the recurring issues, no one read.

The meaning of all this was as follows: at the time of blocking the account, the client was defined as “suspicious” and “damaging the business reputation of the bank” and he is charged a higher commission.

“For example, in PNB Bank (Norvik Banka) it reached 10 thousand euros a month! It was impossible to transfer money to another bank due to account blocking. This story affected some Ukrainian IT companies that had accounts with PNB (Norvik Banka), ”said Volodymyr Harkusha.

The Ministry of Finance is not aware of any cases of similar use of Finmon by our banks. Most likely, in the future most of the friction with the bank can be solved on the spot. Only now will you need to provide more documents.

You can also complain to the NBU or go to court immediately. But our fellow citizens seem to have already chosen their path and are increasingly moving to cash payments.