AML – Career in the World of Databases

How to combine Sherlock Holmes-like inquisitiveness, an analytical mind, foreign language skills and a job in an international environment? The answer lies within the mysterious abbreviation – AML. Not only is there a growing demand for professionals in that field, but AML also poses a chance for a challenging professional career.

Let us picture a Columbian economist who graduated from Harvard and utilized knowledge obtained at that leading U.S. university to put into circulation USD 36 million, generated on the sale of cocaine on the territory of the United States. Working through one of the largest investment banks and several other financial institutions, he managed to transfer that gigantic sum of money to Europe. To finance his operations, he additionally opened over 100 accounts at 68 banks. Sounds like a good thriller script? Nothing further from the truth – the above situation happened in the real world at the end of the '80s and the beginning of the '90s, and rattled the financial systems of such countries as Italy, the United Kingdom, Hungary and Monaco.

Due to the globalization and liberalization of the world economy, colossal heaps of illegal money are "laundered" each day by individuals or institutions working directly on order of organized criminal groups, through free trade zones, loopholes in tax and administrative systems or electronic fund transfers. This process is called money laundering.

Prohibition, laundries and smurfs

Despite the fact that money laundering is connected with an array of complex operations, it always serves the same purpose – legalizing income attained by breaching the law. Thus, money laundering consists in putting into legal circulation payment means, securities or foreign currencies obtained from undisclosed sources. Case-studies reveal that specific actions connected with the money laundering phenomenon occur with certain regularity. That is why literature on the subject matter usually presents the so-called three-stage model, based on three elements:

1. placement – putting cash obtained through crime to financial circulation with the use of banks, insurance companies or casinos; an example being the so-called smurfing, which consists in the transfer of small amounts of money by numerous people, as it does not require validating one's identity.

2. layering – isolating money from its illegal source by executing a series of financial transactions – usually transfers from many banks, preferably foreign ones, operating in tax havens.

3. integration – establishing a legal explanation for the origin of "laundered" funds and putting them to legal circulation; in this case, several tools are applied, such as staged real estate sales, setting up fictitious business entities (so-called shell companies, which run no activity but record revenue), conducting fake mergers, purchase of securities or gold.

Paradoxically, the term "money laundering" is not as metaphorical as it would seem at first glance. Its origins trace back to the prohibition era in the United States and the criminal network established in those times. In the 1920s, the Mafia started looking for ways that would enable it to legalize profits from gambling or alcohol sales and began to open grocery shops, car repair shops or... public laundries. However, the forefather of modern money laundering is believed to be Meyer Lansky – a man who allocated gambling money to Swiss banks and companies based in the Middle East and Hong Kong. Lansky was a diligent student of his great predecessor – Al Capone. In the 1930s, he "discovered" the two main reasons that contributed to the fact that money laundering has still been doing quite well up until today – tax havens and anonymity guaranteed by bank accounts. Back then, no one was aware of the scale of this phenomenon. It was only in the '70s, when Watergate broke out, that the term money laundering hit journals' front pages and became widely used.

From the mid 20th century on, drug trafficking became the main source of illegally obtained revenues. . Yet, money laundering is a far more complex phenomenon, which touches on numerous problems of the modern world. Thanks to the knowledge of white collars, money laundering is tightly connected with such illegal actions as financing terrorism, embezzlement, corruption, bribery, human trafficking, mail fraud and illegal gambling. The growing virtualization and development of the Internet create a fertile ground for money laundering. In a world where each piece of information is turned into a product and money is stripped off its physical form, we are dealing with ever more sophisticated methods of obtaining illegal tender. The matter relates not only to hacker activity and growth of cybercrime significance, but also to the trade in information and products on a new, global scale. The online market Silk Road, often called the Amazon of illegal drugs, may serve as an example. All items listed on the website, i.a. mainly intoxicating substances, are purchased for the Bitcoin cryptocurrency. Another instance is Liberty Reserve – one of the biggest scandals of recent years. That online currency exchange platform enabled criminals from all over the world to put to legal circulation USD 6 billion, obtained by means of various criminal activities, starting from the distribution of child pornography and ending with sales of software used to hack into bank accounts.

"One of money laundering methods that gained significance in the 21st century is the use of online casinos. The practice consists in i.a. deliberately losing money by one player to the benefit of another one, who then withdraws the accumulated funds in a different part of the world, thus, making their origin legal", adds Michał Wujec, AML Operations Expert at Citi Service Center Poland.

El Dorado for illegal finance

The scale of the money laundering phenomenon can only be roughly estimated, as there are no proper control tools available. International organizations specializing in this problem usually cite the calculations of the International Monetary Fund (IMF) of 1998, according to which the accumulated share of the so-called dirty money ranges from 2 to 5 percent of the global GDP. However, a single glance at selected countries or sources of origin of illegal profits gives us a more detailed picture. For example, illegal flow of funds from emerging economies, which are most exposed to such procedures, exceeded USD 900 billion in 2011. The financial crisis of recent years made the problem even more evident – the largest banks in the world were punished with fines reaching up to hundreds of millions of U.S. dollars. Financial institutions based in developed countries transferred illegal money in cooperation with other states, such as Cuba, Iran, Sudan or Libya. Examples can be multiplied; however, in the case of money laundering, what counts are the effects – exploitation of financial markets for laundering purposes may weaken the trust of the public and investors, whose abrupt reactions lead to severe stock market crises. In such a context, the key word is trust. Without it, there is no properly functioning global economy - thanks to trust, an enterprise may smooth out uncertainty following every economic decision. Hence, transparency of the financial system is of utmost importance. Subsequent laws are attempts at guaranteeing that, starting from the American Bank Secrecy Act (1970), through USA Patriot Act (2001), which fights shell banks (institutions without a physical registered office in any country), ending with recommendations of FATF (Financial Action Task Force) or the Third Money Laundering Directive, drafted by the European Commission (2005).

Acts and recommendations, both international and domestic, fall into the category of actions aimed at establishing a common AML (anti-money laundering) policy, consciously used by a growing number of financial institutions. Anti money laundering becomes an important part of not just the corporate responsibility but also the organizational culture as a whole, which is based on trust, transparency and reliability in the eyes of customers and investors. According to the recently published KPMG report "Global Anti-Money Laundering Survey", over 85 percent of banks follow AML policies (the shape of which lies in the hands of top-level managers) on a regular basis.

"AML plays a key role in an organization, as it minimizes the reputation risk and a risk of financial losses arising from intentional or unintentional participation in a transfer of funds generated on criminal activity", stresses Hubert Szaradowski, AML Operations Manager at Citi Service Center Poland.

If you like:

• analyzing large volumes of data;
• taking important decisions and shouldering responsibility;
• working in an international environment for a global institution;
• being part of business processes important for the modern world;
• becoming better by participating in training courses and workshops...

If you:

• are fluent in English;
• have analytical skills, superior thoroughness and perceptiveness;
• know how to prepare analyses on the basis of large volumes of data, on the basis of laws and regulations.
• have a working knowledge of Windows (Word, Excel), online search engines and databases;
• have experience in the field of research and analysis or an economic degree....

... apply for:

• challenging adventure in the AML (AML-ICG Unit) at Citi Service Center Poland in Warsaw;
• and send your resume to kariera@citi.com.