Some of the onerous requirements set for Money Laundering Reporting Officers (MLRO) under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) are:
- to ensure that the firm is compliant with annual AML compliance review process and has been documented fully
- to ensure that a risk assessment is conducted at least annually, but with new and changing risks considered as and when they are identified. Information from the business’s AML supervisory authority, ie ACCA for ACCA practitioners, must be considered
- to ensure that the MLRO has reported to the board (or equivalent managing body) at least annually, providing an assessment of the operations and effectiveness of the business’s MLTPF systems and controls. This should take the form of a written report, supplemented with regular ad hoc meetings or comprehensive management information, to keep senior management engaged with MLTPF compliance and up to date with relevant national and international developments in MLTPF, including new areas of risk and regulatory practice.
ACCA's Technical factsheet: Am I AML compliant? provides a user-friendly checklist of the AML controls that all firms, including sole practitioners, must have in place to ensure that they are compliant with the MLRs 2017.
However, firms must understand it is not only the compliance they should be worried about, but these measurements actually help to:
- identify client associated risks which may have changed since the beginning of the relationship due to the operational changes in their business
- reaffirm that the customer due diligence (CDD) is up to date with the correct level of risk
- establish if there is any change required in the firm’s policies and procedures
- access the effectiveness of the firm-wide risk assessment to prevent the firm from being involved in or being used to facilitate money laundering
- identify the gaps in the staff training or deficiency in the firm’s AML policies and procedures, which is key to the implementation of AML procedures, and take corrective actions in timely manner.
Moreover, having the regular independent AML review process enhances the credibility of the firm’s image with clients, potential investors and regulators.
Watch out for the UK Sanctions List
The UK government publishes the UK Sanctions List, which provides details of those designated under regulations made under the Sanctions Act. The list also details which sanctions measures apply to these persons or ships, and in the case of UK designations, provides a statement of reasons for the designation.
ACCA has guidance on dealing with those potential business opportunities, which also includes a technical factsheet detailing OFSI reporting obligations under financial sanctions and its approach to licensing and compliance.
