AML-CFT Program Design and Implementation With the Help of Risk Insight Experts
Each country issues laws and regulations which includes the minimum set elements that an AML-CFT program should address. Usually, countries follow the recommendations set by the international organizations specialized in money laundering to which they belong, for example FAFT or regional FATF-like organizations.
A sound AML-CFT program should be based on four basic elements:
- A system of internal policies, procedures and controls
- A compliance function with a compliance officer
- An ongoing employee training program
- An independent audit function to test the overall effectiveness of the AML-CFT program
A system of internal policies, procedures and controls defines and supports the entire AML-CFT program. These three parts must aim at mitigating the risks identified during the risk assessment exercise. Companies must indicate the risk level they are prepared to accept and must well describe the procedures and controls to manage that risk level.
Anti-money laundering is a commitment of the company as a whole and should not just be delegated to first line employees. The board of directors is the ultimate responsible for a sound AML-CFT program design and implementation.
Multinational groups should adopt a standard AML-CFT program throughout the companies that are part of the groups. If a company adopts a higher standard, this one should be the start point for designing the AML-CFF programs of other companies. However, there is also a need to accommodate business line-specific requirements.
AML-CFT program design and implementation exercise must deliver a written AML-CFT compliance program which would include policies, procedures and controls that are designed to prevent, detect and deter money laundering and terrorist financing. The companies will have to define how they will:
- Identify high-risk operations
- Inform the board of directors of compliance initiatives, variations from the plan and corrective actions taken
- Develop and maintain a system of metrics and benchmarking reporting
- Assign clear roles and expectations to everyone in the organization
- Meet all AML-CFT regulatory requirements
- Implement risk-based customer due diligence (CDD) policies, procedures and processes
- Provide sufficient controls to detect and report suspicious activities
- Establish training requirements
- Develop and implement new employee screening system
The compliance function is responsible for monitoring the controls of the business. The sophistication of the compliance function should be based upon the company’s size, industry, regulatory environment and the specific risks associated with the products, services and clientele.
In most companies, the board of directors is responsible for appointing a qualified AML-CFT Compliance Officer who will manage the AML-CFT compliance program. He/she will be in charge of the AML-CFT program design and implementation, as well as develop targeted AML-CFT training programs and courses for all the personnel.
Any company needing support in the AML-CFT program design and implementation phases should seek the external assistance of Risk Insight experts.
Risk Insight experts can support your company during the AML-CFT program design and implementation and thus help protect your company from legal, financial, organization and reputation risks.