is close to anarchy. Numerous committees and organizations attempt to coordinate domestic regulatory policies and negotiate international standards but they have no enforcement powers Source: Randall Kroszner, Associate Professor of Business Economics at the University of Chicago Graduate School of Business www.proximalconsulting.com
of markets & financial flows • the dizzying rise of the internet — a single unregulated market • competition, consolidation & collaboration • corporates — staff have to deliver results • technological advances • criminalization of politics • Offshore Financial Centres (OFCs) — economic salvation for obscure jurisdictions. www.proximalconsulting.com
becoming global, outpacing international cooperation to fight it ... [it is] estimated to gross $1.5 trillion a year — a major economic power rivalling multinational corporations Source: United Nations, Human Development Report 1999 www.proximalconsulting.com
per annum … with 400 million regular customers, it is bigger than the world’s oil and gas industry Source: UNODC, Economic and Social Consequences of Drug Abuse and Illicit Trafficking Report
respects no borders. The organized crime groups and terrorist organizations are far more attuned to the realities of the globalist century than western governments are Source: Senior law enforcement official commenting after 9/11
It damages the social, economic, political and cultural development of societies. Organized crime has evolved in times of increasing globalization and expanding international trade: the range of organized crime activities has broadened and diversified. In the last few years, organized crime groups have built up large-scale international networks and amassed substantial profits from illicit trafficking in drugs, human beings and weapons, from the production and sales of counterfeit products, and from international fraud. www.proximalconsulting.com
the legal economy. Organized criminal groups need to be able to launder the proceeds of drug trafficking and commodity smuggling in order to avoid possible legal investigation and prosecution by tax and criminal authorities in relevant jurisdictions. The most dangerous consequence of laundering is the vast amount of money passing through the hands of criminals, enabling them to put these resources to further illegal use. Rapid developments in financial information, technology and communications now allow money to move anywhere in the world with speed and ease. This makes the task of combating money laundering more challenging than ever. www.proximalconsulting.com
of economic crime risks occurring when companies are expanding (e.g. entry into new markets) may have been reduced. • Companies experiencing a reduced turnover may have lower fraud losses. • The motivation to commit economic crime may have increased — driven by financial pressures. www.proximalconsulting.com
economic hardship is likely to be a recipe for increased criminality Source: David Howard, Chairman of the International Authentication Association www.proximalconsulting.com
Fraud losses were up 22% from previous year. • Of the 10 industries surveyed, the financial services sector was hit hardest. • 21% of companies surveyed confirmed that their internal controls had been weakened by cost cutting. Source: Economist Intelligence Unit www.proximalconsulting.com
stolen data on the web • the risks of social networking sites • identification of beneficial owners • the many faces of corruption. www.proximalconsulting.com
councils must take care not to lose focus on fraud prevention and detection Source: UK Audit Commission report on council fraud “Protecting the Public Purse” www.proximalconsulting.com
or machines, so people are the most important element in preventing it. Your marketing/product-development departments will always create new products and services that are stupid: they completely ignore fraud/money-laundering risks. Every organization should create a culture that tries to prevent economic crime. This tone needs to be set from the very top. Note: if your organization is not prepared to do this, do you really want to work there? Every organization must have a unit to prevent, detect and investigate fraud/economic crime. This unit must be staffed with professional, creative and competent people. The customer-facing staff of your organization will always do stupid things and be taken in by criminals — particularly criminals whose business could generate large bonuses or commissions. www.proximalconsulting.com
through my scam; my job was to make sure that they did not have any time to think Source: Alphonse Mortier, convicted fraudster www.proximalconsulting.com
especially if you look as smart and middle class as me Source: An unidentified female shoplifter interviewed in The Daily Mail newspaper (UK), November 2009 www.proximalconsulting.com
consequences; you will continually be at odds with them and manage to make yourself very unpopular in the process. Note: if you do both of these things, you are probably doing your job well! www.proximalconsulting.com
dynamic defences to ensure that your organization does not become an easy target. If your defences are strong, criminals will move on to targets with weaker defences. Train ALL staff in fraud prevention, IT security, data protection and anti-money laundering methods. Prevention is better (and cheaper) than cure. Fire criminals who work for you — and prosecute them. Abolish all talk of “acceptable” fraud losses: it is defeatist. Aim for year-on-year fraud- loss reductions. Record and analyze all losses and show your management what a great job you are doing when losses are (hopefully) reduced. How to do your job even better
out thorough KYC and due diligence checks on your staff, suppliers and customers. Use technology — if only because criminals and terrorists have long been utilizing technology to its full potential. A summary of recommendations
diligence background reports on individuals and companies on a global basis. We also offer a complementary range of services including AML training, country risk reports and bespoke investigations. Our enhanced due diligence reports are tailor-made to our clients' specifications. They are totally different from the usual database-led reports that often fail to meet enhanced due diligence requirements. Our reports present clear, accurate and confidential findings, which enable our clients to make informed business decisions and fulfil their AML obligations. We work with a variety of global clients including regulatory agencies, law firms, individual companies, private banks, trust companies and other firms in the financial sector. Phone +44 (0) 1672 516725 Offices Poughcombe Barns Ogbourne St Andrew Wiltshire SN8 1SE UK Rue Du Rhone 14 1204-Genève Switzerland Email [email protected] Website www.proximalconsulting.com All slide content and design is copyright 2017 Proximal Consulting. No part of the site may be reused without written permission from Proximal Consulting. If you wish to use any content, or would like Proximal Consulting to expand or clarify content, please contact us. PROXIMAL CONSULTING and the related logo are trademarks of Proximal Consulting Limited.
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