The Annual Anti-Money Laundering (AML) Compliance Review is a crucial aspect of any Firm's AML policies and procedures. It provides the Money Laundering Reporting Officer (MLRO) with the opportunity, on an annual basis, to critically assess the Firm's AML policies, procedures and controls, and the operation and adherence to those AML policies, procedures and controls.

In this blog, we will discuss the importance of The Annual Anti-Money Laundering Compliance Review and the key areas that should be covered during the annual process.

Why is the Annual AML Compliance Review Important?

The Annual Anti-Money Laundering Compliance Review serves several essential purposes:

1. Critical Review of Policies and Procedures: The review allows the MLRO to take a step back, critique and evaluate the effectiveness of the Firm's AML Policies and Procedures. This includes assessing whether all employees are aware of these policies and procedures and whether all employees are actively complying with these policies and procedures.

2. Risk Assessment: The review enables the MLRO to evaluate the risks posed to the Firm due to its current client profile and the AML controls in place. This involves reviewing the current list of clients of the Firm, the risk level assigned to those clients and the customer due diligence carried out, which then informs the Firm’s, Firm-Wide Business Risk Assessment report.

3. Customer Due Diligence: The review provides an opportunity to assess the customer due diligence procedures being carried out by the Firm and its employees. This involves the MLRO selecting a sample of client files and carrying out a review of those files, ensuring that the correct level of risk has been deduced; Low, Medium or High Risk, and that the correct level of customer due diligence has been applied; Simplified, Normal or Enhanced Due Diligence.

4. Ongoing Monitoring: The review forms part of the MLRO’s ongoing monitoring of business relationships. This enables the MLRO to make an informed decision as to whether further AML controls are required by the Firm to prevent the Firm from being involved in or being used to facilitate money laundering.

5. Follow-up Actions: The review allows the MLRO to identify any deficiencies in the Firm's AML Policies and Procedures or non-compliance / non-adherence to the Firm’s AML Policies and Procedures by internal employees. The MLRO can take the necessary follow-up actions such as; Refresher AML Training, Full Initial AML Training, disciplinary action, or the updating of the Firm’s AML Manual, Tools and Checklists.

OmniPro’s Accountants Resource Centre (ARC) now contains a complete AML Resource Pack and our updated AML Procedures Manual incorporates the Annual AML Compliance Review at Appendix 6 of the Manual.

Join ARC Today here.

Elaine Jackson of OmniProprovidesRefresher AML Training and Full Initial AML Training to firms that want to ensure all staff are updated of their obligations at the same time each year. Reach out to Elaine by email; [email protected]

Conclusion

The Annual Anti-Money Laundering Compliance Review is a vital aspect of any Firm's AML Policies and Procedures. It allows the MLRO to critically assess the Firm's AML policies, procedures and controls, and the operation and adherence to those AML policies, procedures and controls.

By covering the key areas mentioned above, the MLRO can effectively evaluate the Firm's AML Policies and Procedures and take any necessary remedial action to maintain compliance and mitigate risks, thus ensuring that the firm is not facilitating money laundering or being used as a channel for such activities.

If you require assistance or advice in relation to any of the above matters, please contact our team on 053 91 000 00 or email [email protected].

The contents of this article are meant as a guide only and are not a substitute for professional advice. The authors accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.