Event: Compliance for Financial Institutions

PARIS, July 06, 2023 (GLOBE NEWSWIRE) -- The CBF (Banking and Financial Council) organized an awareness day aimed at banking and financial institutions under the theme "Preventing non-compliance risks for financial institutions: from constraint to opportunity".

The event brought together banking and leasing institutions, insurance and reinsurance companies, investment funds, private equity actors, stock broking intermediaries, as well as regulators, supervisors, and supervisory ministries. The event was organized in collaboration with the international law firm Ashurst LLP (5th largest global firm with over with 3,000 employees, including 1,600 lawyers) and CFC Partners (an accredited operator in certification activities). A panel of top international experts traveled from Quebec, Paris, and London.

Specialized speakers included:

• Cristian Mocanu (Vice President COFICERT France): speaker as a CSR expert on the ESG 1000 standard
• Christian Levesque  (President of ISO Delegation Canada): speaker as co-author of ISO 37000 / ISO 37001 standards and Chair of the standardization committee for the ESG 1000 standard
• Maître Paul Charlot (Lawyer at the Paris Bar, partner at ASHURST): speaker as an expert in AML/CFT and the AML 30000 standard
• Sami Slama (CAMS and member of the CFC Partners network): speaker as an LBA/FT expert on Africa and the Middle East

In a packed hall, facing a distinguished audience consisting of executives and high-ranking officials representing the local financial sector, current and internationally observed topics were discussed and presented, such as economic sanctions related to embargoes, combating money laundering and terrorism financing, fighting corruption, corporate social responsibility, and human rights.

The current context, characterized by a transformation of international management systems and a constant evolution of globalization phenomena, exponentially exposes financial institutions to risks and urges them to organize accordingly. The standardization mechanisms of compliance topics facilitate understanding the issues and the implementation of appropriate practices of good governance concerning social responsibility, anti-money laundering, and anti-corruption efforts.

"These are themes on which we have been working extensively for a few years now, requiring regular updates. We have organized ourselves to ensure continuous vigilance to protect against existing risks," stated the General Delegate of the Banking and Financial Council at the opening session.

"Banking and financial institutions need to be aware of the current international provisions to avoid being excluded and to prevent the termination of their relationships with correspondent banks," she emphasized.

In recent months, the Russo-Ukrainian conflict has demonstrated the importance of the economic sanctions prevention framework within financial institutions. Such requirements have proved essential to safeguard against the application of European or American regulations that could impact companies, regardless of their location.

During his presentation, Me Paul Charlot, a lawyer at the Paris Bar, senior associate in the Dispute Resolution department of the international firm ASHURST, an expert in anti-money laundering and combating the financing of terrorism, and a specialist in the AML 30000 standard, highlighted the risks that financial market participants may face concerning compliance in a broad sense.

"In recent years, I have observed a paradigm shift revealed by the condemnation of certain financial institutions by banking regulators or authorities relying on the extraterritorial application of their rights", he explained.

"A number of correspondent banks increasingly practice de-risking on financial institutions, particularly those located in Africa."

Indeed, the current European and American sanctions can significantly impact the activities of financial institutions, and the consequences for offenders can be particularly problematic and penalizing. "Compliance departments must structure themselves and implement appropriate frameworks to effectively address these risks," emphasized Me Charlot.

Sami Slama, CAMS expert in the AML 30000 standard at CFC Partners, presented the sources of the main risks in the African continent, arising from an economy primarily based on cash transactions (cash economy) and dense and profound informal activities.

Africa, which received $106 billion from the rest of the world between July 2020 and June 2021, of which 2 to 3% of this amount would correspond to financial criminal activity and be part of a money laundering process. Regarding the issue of correspondent banking, the AML expert from CFC Partners announced that, according to a World Bank study, 22% of banks in Africa interviewed admitted to losing correspondent banking relationships due to their "de-risking" policies and certain deficiencies in their anti-money laundering and counter-terrorism financing frameworks.

The issue of anti-corruption within financial institutions also sparked extensive debate during the conference. On this occasion, the CBF invited Christian Levesque, President of the ISO Canada Delegation and a stakeholder in ISO 37001 and ISO 37000 standards, which focus on anti-corruption management and governance, respectively.

Christian Levesque, leveraging his position as Head of the Africa Financial Crime Department at Deloitte, highlighted the state of corruption in the world, with a specific focus on Africa through the Corruption Perceptions Index (CPI) published by Transparency International. Mr. Levesque presented the key pillars of an Anti-Corruption Management System (ACMS) compliant with ISO 37001.

Regarding Corporate Social Responsibility (CSR), Cristian Mocanu, Vice President of COFICERT France, a French certification body specialized in financial and non-financial certifications, discussed the recent certifiable CSR standard, the ESG 1000 repository, whose Standardization Committee is chaired by Mr. Christian Levesque as an ISO standards expert and co-author.

In contrast to the fight against financial crime embodied by the supervision of the Financial Action Task Force (FATF), which standardized practices globally, Cristian Mocanu indicated that rules for CSR were highly diverse and regional.

"This makes the exercise even more complicated, and in the face of increasing public pressure lately, we must be capable of implementing effective CSR management systems that are accessible and applicable in a clear and comprehensive manner," declared the CSR expert.

Facing a disparate legal framework and the multiplicity of existing laws, the expert believed that standardizing CSR practices was a major challenge to regulate these matters uniformly and harmoniously at the global level, particularly in the context of non-financial reporting, under the pressure of public opinion and competent authorities.

Mr. Cristian Mocanu, CSR expert on the ESG 1000 standard, highlighted the unprecedented commitment in this field, recorded today by all financial actors across the spectrum. "According to a global survey, 50% of today's investors or asset managers are ready to divest from investments that are not socially and ethically responsible in terms of corporate governance," he reported.

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