Is it necessary to infantilize compliance officers?


Should we continue to train compliance officers by mentioning unreachable goals, by inflating the importance of their actions and erecting them as the ultimate line of defense which will protect the society against criminals and terrorists?

Or should we be more pragmatic and told them that only 0.2 % of the proceeds of crime are seized, that most of their actions will disturb and inconvenience the work of legitimate business owners and that their job description is above all to protect their financial institution?

Are the compliance officers kids to be motivated or adults to be respected for the efficiency of their actions?

With 99% of criminal proceeds being injected without being noticed in the financial institutions, maybe the training should be focused on criminal activities, on criminal personalities and on the right, provocatively the obligation, to go FAST to the next potential case.

The current tick-in-the box system isn’t working as it should, compliance officers are losing their energy by over-working on cases that they should close FAST if any wrong doing isn’t detected.

With the obligation to protect their employers, by adding multiples layers of useless information as their employers should demonstrate the efficiency of their AML organization, everything is getting SLOW, everything but the criminals.

To compensate for the routine of a very administrative job description the training sessions are going over the top in describing the importance of the work, infantilizing the compliance officers.

We need to show more respect:

  1. To the compliance officers, by allowing them to go faster to the next suspicion
  2. To legitimate business owners, by stopping the inconveniences    
  3. To the public, by changing the system and so increasing the efficiency

How to avoid a Suspicious Activity Report (SAR)?

A Suspicious Activity Report (SAR) named in Hong Kong a STR as Suspicious Transaction Report is raised mainly by Financial Institutions and sent to the Financial Intelligence Unit (FIU).

Being subject to a SAR is a risk to international entrepreneurs and companies with cross-border activities. The bank compliance department will raise a SAR if they don’t understand part of the transactions and / or have difficulties with the company activities.

For legitimate activities , for companies located in offshore jurisdictions with or without complex business models, for businessmen with activities located in medium or high risk countries the emission of a SAR could simply destroy your bank relationship and see the termination of your account.

Additionally working with a company which was once signaled by a Suspicious Activity Report (SAR) could also impact drastically your business.

Banks are de-risking , terminating many bank accounts for ” administrative reasons ” , its obviously difficult to blame them when noticing the huge pressure they are facing from regulatory bodies and recently again with the FINCEN leaks.

YOU are concerned!

Its easier to terminate an account than to conduct a proper compliance, the pressure on banks will impact drastically small and medium enterprises as when the account is important a Suspicious Activity Report (SAR) is raised and this also will trigger additional compliance from the bank, but if the account as only few millions deposited the bank will be at ease to terminate the account.

A Suspicious Activity Report (SAR) can be avoided with simple and effective steps:

  1. A very detailed onboarding compliance report , with explanation and proofs to have the bank au fait of your activities
  2. A continuous monitoring of your business partners , making sure that their potential issues might not impact your own bank relationship.
  3. Immediate information to your bank if you have to process a transaction not in line with your onboarding compliance report.
  4. immediate information to the bank if your activities are growing fast, if you develop new markets, with explanations and the copies or agreements.
  5. Immediate and diligent answer to a question from your bank , remaining calm in front of poor and often difficult to comprehend questioning.

Using the services of your corporate services provider to answer to a financial institution is a good concept, avoiding emotional reactions and demonstrating with documents being the only valid answer.

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