Accountancy and tax firms are often worried about what are the most important parts of the AML legislation and requirements that they need to concentrate on. Here is a list of the Top 8 requirements that need the most attention.
Here is a list of the Top 8 requirements that need the most attention.
1. Firm-wide risk assessment
Sometimes this document is called the Business Wide Risk Assessment. Firms must document the money laundering and terrorist financing risks they face across five key areas:
- their client base,
- services provided,
- geographies,
- transactions, and
- delivery channels, and
explain how those risks are mitigated. See our Business Risk Assessment for AML purposes sample template from June 2024 for assistance.
2. Customer due diligence (CDD)
Firms must identify the client, understand ownership and control, assess risk, and verify identity. This includes identifying beneficial owners and applying a risk-based approach.
3. Ongoing monitoring
Client Due Diligence (CDD) also known as ongoing monitoring is not a once-off exercise. New clients typically attract the most CDD at the outset of the client relationship but if your CDD documentation is already five years old, without any interim reviews, its likely to be out of date. Firms must keep client information and risk assessments up to date, revisit them when circumstances change, and review transactions for anything unusual.
4. Enhanced due diligence (EDD) where required
Higher-risk situations require extra checks, such as deeper source of funds/source of wealth enquiries, sanctions and PEP screening, closer monitoring, and stronger internal approvals.
5. Suspicious transaction reporting (STRs)
Firm staff must know when concerns amount to suspicion and when a STR should be submitted internally to their MLRO. Staff and the MLRO must avoid tipping off and document decisions carefully.
6. Written AML policies, controls, and procedures
Firms need clear written procedures showing how they manage AML compliance in practice, including CDD, escalation of reporting to the next level and to the MLRO, record-keeping, and internal controls.
7. Training
Staff and relevant subcontractors must be trained so they understand AML risks, red flags, and how to escalate concerns appropriately.
8. Compliance review and RBO discrepancy reporting
Firms should regularly review whether their AML controls are working effectively, and they must have procedures to identify and report two types of anomalies:
in beneficial ownership information to the RBO.
If any of the above matters seem unclear, please contact us at john@jmcc.ie for an AML Compliance Review and/or a tailored AML Training webinar.
We typically tailor training in audit, accounting and AML to suit each firm’s unique requirements.
Publications and AML webinar:
- The ISQM TOOLKIT 2022 is available to purchase here.
- See our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
- To ensure your letters of engagement and similar templates are up to date 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.
