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Risk impact is in the eye of the beholder: The difficulties faced by the regulator in an offshore financial centre
Journal of Financial Compliance,
1
(1),
37-45
(2017)
Abstract
Protecting the financial integrity and reputation of the financial sector by achieving strong anti-money laundering and combating terrorist financing regimes is a crucial responsibility of the regulator. Conflicting objectives exist between the regulator and the financial institution based upon their assessment, should money laundering occur, of the reputational impact to the country’s financial sector and to the financial institution itself. The expectation of the regulator, through rigorous supervision, to uphold the integrity of the financial sector continues to increase. While agreeing with the concept of effective management of money laundering and terrorist financing risks, the financial institution must protect the integrity of the financial system in the context of an environment of demanding cost constraints. This paper considers the impact of centralisation as a cost effective operating model against the increasing demand and expectations for robust regulatory compliance, highlighting the conflicting objectives of both the regulator and the financial institution.
Keywords: offshore financial centre; anti-money laundering (AML) compliance; risk; transaction monitoring; regulator; regulatory fines
The full article is available to subscribers to the journal.
Author's Biography
Paul Coleman is Director of Compliance for the Turks and Caicos Islands Financial Services Commission (FSC), which he joined in November 2012. His initial appointment was to implement extended coverage of the anti-money laundering (AML) and combating the financing of terrorism (CFT) regime in the Turks and Caicos Islands to designated non-financial businesses and professions. In June 2014, Paul’s responsibilities were increased to lead the newly formed compliance unit of the FSC with AML/CFT supervisory responsibilities for the broader group of all bank and non-bank financial businesses as well as non-profit organisations. Paul has a distinctive professional background in AML both internationally and in the Turks and Caicos Islands. He has almost 20 years’ private sector experience operating throughout the UK and the Caribbean, and in particular the Turks and Caicos Islands, holding positions in retail and international banking as an internal auditor, business development director and money laundering reporting officer. He is now operating in the supervisory discipline for the FSC. Using his wide ranging specialism, Paul has also acted as an expert witness for a number of anti-money laundering legal cases. Paul is a qualified banker, internal auditor and certified advanced AML audit specialist (CAMS-audit).
