More than 1,500 attendees from the United States and 40 countries have signed up to the Money Laundering Alert 13th Annual International Conference at the Westin Diplomat Resort & Spa in Hollywood, Florida March 17-19, 2008.
The conference organizer, Miami-based Alert Global Media, Inc. is the publisher of Money Laundering Alert and moneylaundering.com Premium, the world’s foremost sources of money laundering news, analysis and guidance.
Hany Abou-El-Fotouh, First Vice President and Group Head of Corporate Governance and Compliance at ABC Bank Egypt has participated at three panels among prominent panelists from leading world financial institutions and regulatory authorities. He describes the conference as “an opportunity to offer guidance from Anti Money Laundering (AML) experts offering strategies and solutions particularly how to survive in this demanding regulatory environment”
Abou-el-Fotouh has tackled major misconceptions about Islamic finance and banking, preparation of AML independent testing and regulatory examinations as well as best practices about tailoring AML training program .The panels have been highly interactive.
About the size of Islamic finance Abou-El-Fotouh said “Islamic finance is rapidly growing. It is estimated at USD 700 bn globally and expected to be USD 1.4 trillion. There are more than 300 Islamic financial institutions and Islamic windows operating globally. The major principles of Islamic finance are prohibition of all kind of interest, no financing of sinful and socially irresponsible activities as well and dealings are on contractual basis”
He clarified several common misconceptions about Islamic banking and finance. “The major myth about Islamic banking is that it is about a cluster of hard line religious believers and about religion only. The reality is nearly 60% of Islamic banks’ customers are non-Muslims who mostly believe that Islamic finance is an alternative way of doing business and making money through wealth creation and distribution” Said Abou-El-Fotouh.
He further added “another misconception describes Islamic banks as being regulated only by Sharia (Islamic law). The reality is Islamic banks draw their founding blocks from Sharia and they operate fully under the `law of land’ where they exist”
“Anti-money-laundering training is an integral component of compliance program”, said Abou-El-Fotouh. “The training program must be tailored to all professional staff relevant to the work they do. Board members and senior management should understand AML regulatory requirements, ramifications of noncompliance, and the risks posed to the financial institution. The training should be conducted annually.”
Speaking on the requirements of independent audit testing of AML compliance program, Abou-El-Fotouh said “The regulations require an independent review, not a formal audit by a certified public accountant or third-party consultant. The institution does not necessarily need to hire an outside auditor or consultant. The review may be conducted by an officer, employee or group of employees, so long as the reviewer is not the designated compliance officer and does not report directly to the compliance officer. Frequency and scope depend on the financial institution’s risk assessment.”
He further explained that regulators assess an internal audit’s thoroughness and findings, as well as how effectively it tracks management’s corrective action to determine whether they, the examiners, can rely upon the audit department’s results to better scope their work.
Abou-El-Fotouh concluded by saying “there is much to be done to fight money laundering. It is a financial crime that damages financial institutions, impacts economic growth, reduces productivity, and distorts the economy’s trade and capital flows. It takes away funds that could be used to alleviate health and social problems”.
About the author
First vice president and group head of corporate governance and compliance, ABC Bank, Egypt, he is a leading expert on money laundering and terrorist financing controls in the Middle East-North Africa region with extensive experience in AML compliance and training. Founder of the Middle East Compliance Officers’ Forum, he has been honored for his work in promoting compliance awareness in Egypt and the MENA region. Previously, he held top compliance positions in multinational institutions, such as HSBC Bank Egypt, Banque Saudi Fransi, and Oman International Bank.
Hany Abou-El-Fotouh, CAMS
FVP Corporate Governance & Compliance Group Head
ABC Bank – Egypt