Reporter Sue Stuart finds out why A compliance training adviser from the Caribbean Anti-Money Laundering Programme (CALP), associated with the Caribbean Financial Action Task Force, is helping to set up training programmes for Bermuda's compliance officers.

Manuel Vasquez was in Bermuda last Thursday at the invitation of the Association of Bermuda Compliance Officers -ABCO.

Under the Proceeds of Crime Act firms and institutions are required by law to implement staff training programmes in compliance with the regulatory guidelines. Staff at all levels need to be alert to the possibilities of their organisation being abused by money launderers and to be aware of their legal reporting obligations when they spot something suspicious.

ABCO invited Mr. Vasquez, CALP's financial sector adviser, to address its members to help them formulate training programmes within their own organisations.

He said, "This is part of business risk management as, under the law, failure to comply with legislation exposes an organisation and individuals within an organisation to legal liability.

"Money laundering has increased potential to cause real reputational damage to institutions and to Bermuda.

"As an offshore centre it is important to realise that you cannot just take an insular view, because Bermuda's market is all around the world. Just because there are no bearer shares in Bermuda does not mean there is no risk, because business is being done here with trust companies from other jurisdictions that do have bearer shares and IBCs.

"The risk areas in any place are reflected in the business lines operating there. Bermuda has been able to avoid a lot of money laundering because the main line of business is insurance. The type of insurance marketed in the Island is not in the high risk area.

"This is unlike places such as Cayman and the Bahamas where the diverse finance industry leaves them much more exposed. But risk areas here include the banking sector and smaller investment institutions.'' Mr. Vasquez explained that training programmes need to be devised for all levels, right up to the board, so that everyone understands their responsibilities and potential liabilities. A new employee who has yet to learn where the coffee machine is will not readily take a lot of information on board, whereas an existing employee can be given more detailed training.

Junior management needs to be made aware of the need to keep up with any new legal issues, products and lines of business and what attendant risks there are. Compliance officers will have to interact with outside bodies such as the police or lawyers and must keep up with changes in their market places. They also need constant access to publications and seminars dealing with money laundering and attendant issues.

" Everything should be focussed on risk management. The time needed to defend a money laundering charge is lengthy and it can be very expensive,'' said Mr.

Vasquez.

CALP is associated to the CFATF and began operating in 1999. It is funded by the European Union, the US and the UK and provides technical assistance and training to beneficiary countries in their anti-money laundering efforts.

Its five year programme includes the following objectives: to reduce laundering of proceeds of serious crime; to facilitate investigation and prosecution of money laundering offences; to facilitate seizure and forfeiture of property associated with criminal activity; to strengthen the capacity of regional institutions and promote intra-regional cooperation in addressing money laundering issues; to provide technical assistance and training; to develop local expertise in order to ensure the long term sustainability of anti-money laundering programmes.

Following the meeting Mr. Vasquez had on Thursday with members of ABCO, each member will use what they learned to formulate their own firm's training programmes. Mr. Vasquez will be returning to Bermuda to follow up further invitations from the association, individual firms and the public sector.

Owen Reid, chairman and co founder of ABCO, said he hoped more compliance officers and anyone associated with anti-money laundering will join the association to take advantage of the information and training opportunities available.

Spending the word: compliance training advisor Manual Vasquez