Study On The Evaluation System Of AML Internal Control Efficiency Of The Bank

1. Background. With the rapid development of the economy and financial morphological diversification, money laundering has become an unavoidable issue in the socio-economic formation. Serious crime of corruption, fraud, smuggling underworld and terrorist activities have become inseparable symbiotic crime with money-laundering. The revenue generated by the presence of their crime has motives to disguise, concealing, harboring, and transfer. First, these crimes endanger social fairness, justice, social security and stability. Second, the economic activity and funding liquidity caused by the money laundering have irrational characteristics, which affect the financial stability and healthy. Therefore, the anti-money laundering has become an important practice in the international community.International and domestic regulators gradually become aware that AML is an effective means of combating money laundering, maintaining economic and financial stability, at the same time, it contain a variety of serious predicate offenses. The AML funds monitoring can discover suspicious capital flows of predicate offenses while reducing the economic losses caused by corruption, smuggling and other criminal.With the driving of external macro power, bank as the main areas of laundered funds flowing became the forefront of theAML. Regulatory authorities formulate the AML rules for banks, including internal control system, customer due diligence, monitoring and reporting of suspicious transactions, record keeping, training etc. Bank AML activities are theoretical explanations for the positive externalities of economic activity. Regulatory and other external measures are needed to ensure the AML social supply. After the bank AML activities to be executed, the execution is not ideal. Banks are always passive to meet regulatory action standards, resulting in a great waste of corporate internal and social resources. Under the guidance of the relevant international organizations, bank AML activities changed from "rules-based" to "risk-based"."Risk-based" requires banks to allocate the anti-money laundering resources on risk identification and assessment. It means that limited resources focus into areas of high money laundering risk. This guidance can improve the efficiency of AML, and can also promote the quality of the bank internal control activities. Banks are facing the AML requirements biochemical external costs. Banks want to internalize external AML costs.2. Research purposes. This thesis is based on t public product attribute of the bank AML, and focus on mining its internal control attribute. The banks can avoid most of the ML risks if they create a reasonable AML internal control system. It is the difficulty of defining what a reasonable AML internal control system is. The core is to integrate resources of the bank and embed the AML requirements into the bank’s overall internal control system. Then, the paper is to establish an effective evaluation system to guarantee the suitability of AML system.AML control efficiency is reflected in contrast between risks decided by corporate strategic and the control measures taken relativities. The evaluation results under the unified criteria reflect the AML condition of a bank and a regional.3. Main content. The first chapter introduces the research background of the thesis. With the introduction of anti-money laundering development course, the thesis leads to the necessity, urgency and practical significance of the topic, and the research purpose, innovative research ideas of the paper. The second chapter focuses on the literature in the field of the topic. The subject matters two academic areas, the Anti-Money Laundering and internal control. There are a large number of separate literatures of the two, but the combination literature is weak. The third chapter is the analysis of the banks’ anti-money laundering activities attributes, but also the full text of the theoretical basis. Establishing bank anti-money laundering activities on the basis of public goods and internal control dual properties, the paper focuses describing the theoretical basis of these two areas, and leads to build evaluation system of bank AML internal control efficiency. The fourth chapter is to build a2D index system to evaluate the efficiency of AML internal control system. The system is learned from the ERM which is the achievement of enterprise control theory in risk management field. In chapter five, there is an evaluation model of AML internal control efficiency on comprehensive evaluation method. The sixth chapter is to test the evaluation model which is established in chapter five. Then we can use the data and consequence of the model to manage the bank’s AML internal control system. Chapter Ⅶ supplies some recommendations and Prospects to improve the evaluation model.4. Innovation. The main innovation of this paper is the firstly demonstration on dual properties of public goods and internal control for bank AML. It helps to find internal power for bank AML. Banks can stand on a balance spot to carry their AML activities. Second, the paper firstly use ERM framework to build a two-dimensional evaluation model to evaluation the fitness of AML system. Thirdly, the paper establishes an intergral index system for AML internal control efficiency. Finally, the paper unifies the inside and outside motives of bank AML. Based on the uniform information platform of AML evaluation system, with the integration use of evaluation information, it can meet the external regulatory requirements and internal management needs.