Thomson Reuters & The Institute of Finance Inaugurate 10th Compliance and Anti-Money Laundering Seminar in Saudi Arabia
Thomson Reuters inaugurated the 10th Compliance and Anti-Money Laundering Seminar in association with the Institute of Finance and under the patronage of His Excellency Dr. Ahmed Abdulkarim Akholifey, Governor of the Saudi Arabian Monetary Authority (SAMA) and Chairman of Anti-Money Laundering Permanent Committee (AMLPC)
Speaking at the opening ceremony, Dr. Fahad AL Shathri, Deputy Governor for Supervision, SAMA, said: “Saudi Arabia has been instrumental in directing all financial institutions to abide by the policies that meet the compliance standards including reporting and uncovering financial crime. In the past few years, we have seen more deployment of state-of-the-art technologies by financial institutions as they continue to roll out strict anti-money laundering policies.”
Commenting on the Financial Action Task Force’s (FATF) report on Saudi Arabia, Dr. Fahad pointed out that 36 out of the 40 FATF recommendations were rated compliant and largely compliant by Saudi Arabia. In comparison, only four recommendations were rated as partial complaints, which confirms the government’s serious efforts to meet the international standards in countering financial crimes. He added that Saudi Arabia’s efforts were highly rated and acknowledged, especially in respect to the quality of managing money laundering and terrorist financing risks, carrying out national risk assessments, adopting risk measures by concerned parties, supporting financial institutions to meet their compliance commitments, implementing United Nations recommendations, and finally rolling out procedures that govern charity and nonprofit organizations.
Vikas Jain, Head of Financial Institutions, MENA, Thomson Reuters, said: “According to the Thomson Reuters Global Cost of Compliance in 2018, 61 percent of firms are expecting an increase in their total compliance budget in 2018. Alongside increasing budgets for 2018, 52 percent of firms expect their compliance team’s size to remain the same in 2018, and 43 percent expect it to grow. We continue to see increasing compliance activity in MENA. Firms in the region need to ensure that they invest in, and value, compliance.”
Mr. Adel Al Qulish, Senior Advisor to the Governor, SAMA & Vice-Chairman of the Anti-Money Laundering Permanent Committee (AMLPC), spoke about Saudi Arabia’s positive relationship and engagement with FATF. “We work closely with FATF and have seen positive momentum. A mutual valuation was concluded in June, and a final report was just released two days ago,” he noted.
Speaking about the report’s main outcomes, Mr. AlQulish explained that the positive ratings confirm Saudi Arabia’s response in utilizing all available resources to execute sound anti-money laundering and terrorist financing policies. “Saudi Arabia has solid understanding of Money Laundering and Terrorist Financing risks. We have done national risk assessments and have always focused on countering terrorist financing along with money laundering. The report confirms the effectiveness of Saudi Arabia’s supervision activities to oversee financial institutions and ensure that a robust compliance system is in place.”
Mr. Adel added that the country’s efforts in technical compliance were acknowledged in the FATF report. “Saudi Arabia has streamlined and aligned its legislation with the FATF recommendations. Now financial institutions have to do a risk assessment, and the public sector has to conduct these assessments. We have seen several new provisions added to the legal framework to foster a solid compliance infrastructure,” he noted.
Mr. Adel concluded that Saudi Arabia has strong communications with the private sector, which is unique for the Kingdom across the MENA region.
Dr. Alwaleed Alsheikh, Executive Secretary, MENAFATF, spoke about the second round of the MENAFATF regulations. “We have now added an effectiveness evaluation. All MENA countries are unique in their own way. Saudi Arabia has a large financial industry, and we have always seen a transparent two-way dialogue between the regulator and the private sector. Saudi is a great story as to the effectiveness standard. The kind of communications that the private sector receives from regulators confirms how successful the regulator’s efforts have been so far.”
Matthew P. Pelligrino, Financial Attaché to Saudi Arabia, Bahrain, and Yemen, United States Department of the Treasury, explained that Saudi Arabia made tremendous strides in countering financial crime. He pointed out that the Saudi government has been proactively sharing information and best practice in partnership with the regulators, security services, and diplomats.
“Saudi has been an ally to the United States, and we have seen so many initiatives rolling out as a result. Between 2015 and 2018, Saudi Arabia has been instrumental in sanctioning terrorism financiers. The United States and Saudi Arabia have been carrying out those sanctions closely together. Both governments have brought together GCC countries to conduct a collective action across the region. Such efforts are crucial for the evolvement of regulatory action to counter the new criminal methods developed by terrorist groups,” he noted.
Faisal Al-Juwaidi, Advisor to Deputy Governor for Banking Operations, SAMA, noted that SAMA has been conducting several testings on Regtech solutions. “Financial institutions have to work closely with regulators to ensure the success of Regtech solutions. Innovation is key for Regtech, and that is why we are focused on enabling the financial industry to innovate in the marketplace.”
Speaking about the acceleration of Fintech, Athal Al-Harbi, Head of Compliance, Samba Financial Group, pointed out that the pace of Fintech development in the region has not been fast enough. “We see several good applications for blockchain solutions such as KYC. We believe that Blockchain can provide comprehensive data coverage that will strengthen reporting and eventually maximize market efficiency.”
