Financial intelligence units (FIUs) play a central role in implementing effective and robust mechanisms and regimes to fight money laundering and combat terrorism financing.
Assessments of anti-money laundering (AML) and counter financing of terrorism (CFT) frameworks have been carried out since 1992, and FIUs have been an integral part of these assessments since the beginning. Notably, suspicious transaction reporting systems used by FIUs are the driving force in all anti-money laundering regimes, positioning FIUs as central bodies that continue to play a key role in national anti-money laundering efforts.
National assessments of AML/CFT regimes are conducted by the Financial Action Task Force (FATF) through its regional bodies (referred to as FSRBs) or by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL).
The assessors conduct an independent review of the institutional framework, relevant AML/CFT laws, regulations, guidelines and other requirements, as well as other regulatory measures and systems in place to deter and combat money laundering and the financing of terrorism, which may occur through financial institutions or Designated Non-Financial Businesses and Professions (DNFBPs). The assessors also examine the capacity, implementation, and effectiveness of all these systems and mechanisms.
The outcome of an assessment is a summary of the AML/CFT measures in place in a country at the time of the mission, or shortly thereafter. It describes and analyzes those measures, sets out the country’s level of compliance with all FATF recommendations and provides advice on how certain aspects of the systems could be strengthened.
These recommendations often include strengthening a basic legal framework for combating money laundering and terrorist financing in a country in a number of areas, including but not limited to, the amendment of AML laws to expand the range of predicate offences, ability to interact with reporting entities (e.g., request information), and the provision of greater capabilities for the FIU.
In addition to their critical role in national AML/CFT regimes, FIUs provide operational support to the work of other competent authorities (e.g., law enforcement agencies). FIUs also have a key role in the global fight against money laundering, the financing of terrorism, and other related crimes. As a result, robust IT systems for an FIU are necessary to ensure its ability to transform data into financial intelligence. An FIU cannot perform its functions (e.g., timely access to information; searching of databases for analysis or making inquiries on behalf of foreign counterparts; and preparing trend analysis reports) effectively without the use of up-to-date IT systems.
Many international organizations, including the World Bank and the IMF, have been reviewing and advising on the effectiveness and efficiency of AML/CFT national systems, or of specific AML/CFT mechanisms in place (i.e., supervisory structure, justice system framework, etc.), to assist governments in improving their resource allocation or in updating their AML/CFT policies.
In addition, the FIU Information System Maturity Model (FISMM), developed by the Egmont Group of FIUs, is a comprehensive framework that enables FIUs of varied sizes and contexts to assess the maturity level of their processes and IT systems. FISMM describes stages through 15 domains (FD01-FD15) tracking the progress of these processes as they are defined, implemented, and improved. This framework also assists in strategy formulation, performance management, process improvement, and technology evaluation within an FIU’s environment.
Five types of FIUs (in terms of an FIU’s size and context) have been identified: a) small FIUs in fragile countries; b) small FIUs in stable countries; c) average FIUs; d) big data FIUs; and e) FIUs supporting a distributed user community or distributed financial institutions.
goPortfolio software products support various domains of FISMM (FD01-FD13), for all types of FIUs. The goIDM model, through an end-to-end process, supports FISMM domains, in particular, to satisfy the requirements for technical infrastructure management domain or IT strategic alignment (FD14), and the information security management domain (FD15).
It is important to also note that the goPortfolio software products provide an enterprise architecture framework for FIUs and takes into consideration FATF recommendations, the 5th EU AML directive, and Egmont Group principles. The goPortfolio Suite covers four domains: a) AML/CFT business architecture; b) data architecture between reporting entities; FIUs and other national/regional/international stakeholders; c) application architecture; and d) infrastructure (technology) architecture, which includes information security. Some of the innovative tools that goPortfolio offers are goINTEL, goBlockChain, and goWatchList. These solutions take into account the latest industry developments, whether new technologies (e.g. virtual currencies/mobile payments) or new regulations (e.g.: 5th EU AML directive).