After a Poor AML Inspection Result – 6 Things to Do (and 2 Things to Avoid)

by John McCarthy Consulting Ltd. | May 18, 2024 | Blog, News

The scenario: Your firm has had a poor outcome from a recent AML Inspection and urgent remedial action is required.

You may have received a list of significant AML Compliance failings from your professional body which you are required to address within a defined timeline. Sometimes these failings are accompanied by additional points to be addressed before the next review.

The following six items need to be implemented as soon as possible:

Do:

1. Promptly acknowledge receipt of the correspondence.
2. If you think you are going to need more time to respond, contact the reviewer immediately and ask for the additional time you need. (You will only get one chance to make this request, and be sure to do so well before the time limit expires.)
3. Consider carefully whether you need to obtain external assistance to deal with the matters, especially if:
   • You are not confident of your understanding of AML requirements
   • The reviewer has indicated that disciplinary proceedings are a possibility
   • You consider the reviewer’s comments are unfair or unreasonable
4. Stand back and consider whether the firm’s entire approach to AML Compliance needs a re-think, including your firm’s use (or lack thereof) of an AML Compliance package
5. Carefully study the reviewer’s criticisms and address them comprehensively in your response, including (if appropriate), revised versions of documents such as the firm’s:
   • AML Policies, Controls & Procedures
   • Firm-Wide Risk Assessment
   • In relation to individual clients reviewed, Client Risk Assessments and Client Due Diligence
6. Ensure that all responses are factually correct and meticulously accurate.

DON’T

1. Delay in responding to the review – be proactive.
2. Criticise the reviewer’s approach or lack of understanding of your firm – instead take a positive approach and send the reviewer additional information to be considered in support of your case.

Overall, be positive and proactive for a much more successful outcome.

To hear more about the latest AML developments and how to be on the alert for suspicions of money laundering and terrorist financing under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021, see our latest Anti-Money Laundering webinar here.

All our CPD courses are listed here, including our Audit Update webinar.

Please go to our website to see our:

• Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) — View the Table of Contents here.
• AML Webinar (December 2023) available here, which accompanies the AML Manual. It explains the latest legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
• Letters of engagement and similar templates. Please visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
• ISQM TOOLKIT, or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at john@jmcc.ie.
• We typically tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.