Ethics and governance in the European Financial centers

The Wolfsberg Group is an association of twelve global banks, which aims to develop financial services industry standards, and related products, for Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies.

The Group came together in 2000, at the Château Wolfsberg in north-eastern Switzerland, in the company of representatives from Transparency International.

The Wolfsberg Anti-Money Laundering Principles for Private Banking were subsequently published in October
2000 (and revised in May 2002). The Group then published a Statement on the Financing of Terrorism in January 2002, and also released the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking in November 2002 and the Wolfsberg Statement on Monitoring Screening and Searching in September 2003. In 2004, the Wolfsberg Group focused on the development of a due diligence model for financial institutions, in co-operation with Banker's Almanac, thereby fulfilling one of the recommendations made in the Correspondent Banking Principles. During 2005 and early 2006, the Wolfsberg Group of banks actively worked on four separate papers, all of which aim to provide guidance with regard to a number of areas of banking activity where standards had yet to be fully articulated by lawmakers or regulators. It was hoped that these papers would provide general assistance to industry participants and regulatory bodies when shaping their own policies and guidance, as well as making a valuable contribution to the fight against money laundering. The papers were all published in June 2006, and consisted of two sets of guidance: Guidance on a Risk Based Approach for Managing Money Laundering Risks and AML Guidance for Mutual Funds and Other Pooled Investment Vehicles.


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Anti-terrorist justice officials from nine countries met in Paris on Thursday for closed-door talks on creating a new international network to ward off attacks and to work out a common definition of charges.

At the invitation of French Justice Minister Pascal Clement, 41 anti-terrorist judges and other justice officials from the United States, Britain, Germany, Spain, Indonesia, Morocco and the Netherlands joined the meeting.

Were attending officials from Eurojust, a Europe-wide body overseeing efforts to fight organized crime and transnational crime.


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Article IHT

Speech : Pascal Clement, French Minister of Justice (in French)

According to a study on account of the European community the international market for statutory audits of large and very large companies is highly concentrated and dominated by the Big-4 networks. The likelihood of new entrants into this market is very limited in the coming years. Additionally, under the current circumstances, middle-tier firms are unlikely to become a major alternative if a Big-4 network fails.

Big Four firms offer two main categories of services: on the one hand audit services and on the other hand advisory services. But in any case they may be auditor and advisor for the same client.

As far as money laundering is concerned, auditors are required by laws and regulations to report suspicions of money laundering.

They are clearly between the devil and the deep blue sea: on the one hand their may be fined if they do not report illegal behaviours; but on the other hand they may loose a client if they do so. In both cases they may loose money and reputation.

There may be a strong ethical problem for the body corporate in the framework of advisory services. Advisory services should only be preventive services but they should not, under any circumstances, help clients resolve the regulatory problems in a curative action regarding money laundering without reporting the illegal behaviour. Otherwise the Body Corporate would have a complicit action with the reputational consequences because it remains anyway an audit firm.

That’s the reason why an independent third party, which does not, under any circumstances, condone money laundering and unethical behaviours in general, would help clients resolve in a pragmatic way the ethical predicament and, where they are regulated by a professional body, would assist them with any disclosures they are compelled to make to the authorities and the regulator to protect the reputation of both auditors and clients



Links

Auditors' liability: Commission publishes independent study on economic impact of current rules (04/10/2006)


Responsabilité des sociétés d'audit: la Commission lance une consultation sur une réforme éventuelle des régimes de responsabilité dans l'UE (18/01/2007)