Earlier this year, the FMA released its annual AML/CFT report. The aim of this report is to summarise the FMA’s monitoring activity to help reporting entities better understand its expectations
in order to improve their AML/CFT systems and processes.
The report outlined that the main impediments to reporting entities maintaining strong AML/CFT compliance were:
- Risk assessments containing unclear documentation of risks, which then lead to a lack of evidence of risk conclusions;
- Unsupervised outsourcing of CDD procedures to third parties, without maintaining clear control over the risks posed by the outsourcing;
- A clear distinguishing between what constitutes an “unusual” transaction and what constitutes a “suspicious” transaction;
- Recording specific and verifiable information relating to the nature and purpose of a customer’s business relationship during EDD procedures:
- Lack of sufficient governance and senior management understanding of the business’ AML/CFT regime and business operations;
- A general lack of commitment to keeping staff trained.
The FMA’s report is very valuable information from the regulators; as you know we don’t get to hear from them publicly on the best way to implement AML/CFT policies and procedures very often.
The prudent course of action is to read through the report and identify any red flags you might think your business is exposed to. If you find one, or you’re not sure, email us at firstname.lastname@example.org and we’ll help you out.