Keeping your AML housekeeping up-to-date

By Malcolm Driscoll and Caroline Walters, Lead and Senior AML Consultants, FCS Compliance

Keeping your AML housekeeping up-to-date

Policies and Procedures (P&P) & Risk Assessment/Training ongoing monitoring by senior staff and/or MLRO

It’s important to keep on top of your anti-money laundering (AML) housekeeping. And it’s not just us saying this but HMRC too.  The fast-moving situation in Russia has increased AML risks for businesses and, in light of this, HMRC recommends that senior managers ensure that their Policies and Procedures are reviewed at least once a year.

Managing money laundering risks to your business is not a one-off exercise.  AML legislation is continually being updated and businesses need to ensure they’re fully up to speed at all times.

To ensure you have an effective risk management process, we would suggest you put an internal mechanism in place to remind you to review your policies, procedures and risk assessments.

In regards to the above and specifically for Customer Due Diligence (CDD), it is vital that you adhere to whatever procedures you have documented within the manual and if you vary from this you must mitigate why you have not followed your own procedures on the client risk assessment. (You can get in touch if you need support with this.)

Training is an integral part of the Policy and Procedures document. HMRC suggest that staff attend training at least every two years, allowing you to keep up to date with changes to AML guidance – not just legislative changes, but national risk assessments too. The training should be appropriate to the individual staff member’s AML role within a business. This means that for those who play an integral AML position their training must reflect this.  An advanced course or one specifically aimed at Money Laundering Reporting Officer (MLRO) would for example be particularly relevant.

The training needs should be identified on a continuous basis, with records -including course content – noted along the way.  It’s worth remembering that staff training is needed when new employees join a business, move to a new job or when they change roles within a company. (See FCS training options here.)

New guidance from HMRC

HMRC says that every relevant business must appoint a Nominated Officer – also knowns as a Money Laundering Reporting Officer (MLRO) – and that this person should be of an appropriate level of seniority

This is because Nominated Officers are now expected to make decisions on transactions within the business. Previously it wasn’t unheard of for a company to have appointed an office administrator into this role. However, HMRC has clearly stated, given the responsibility they’re expected to carry, that this is no longer suitable.

Remember you must inform HMRC of any appointment or change in a Nominated Officer within 14 days.  You should also think about appointing a Deputy Nominated Officer who could fulfil the nominated officer’s role in their absence. The Nominated Officer is not only responsible for ensuring that Policies and Procedures are updated and training provided but is also responsible for receiving internal information reports on suspicious activity (SARs) and reporting these to the National Crime Agency (NCA.)

Furthermore, there must be a clearly defined process within the organisation for staff to raise concerns, produce a report and for the Nominated Officer to file a Suspicious Activity Report (SAR) if appropriate.

Get in touch with us if you would like any help or support on this topic by clicking here.

^{Important note: Your firm-wide documentation (Policies, Controls and Procedures and Risk-Assessment) should be regularly reviewed and updated, as per the legislation. All changes must be recorded and approved by senior management. As mentioned, If your firm-wide documentation has been put in place by FCS Compliance over the past few years, we would advise you renew your documentation from a legislation perspective (even if there have been no major changes in your business) as there has been updated guidance and legislative changes that will be applicable. Please get in touch with Georgie: georgie@fcscompliance.co.uk if you would like further information and to discuss next steps.}