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AML 360° Assessment
Increasingly, Regulators hold Board Directors personally responsible for any AML failures within their firm. A robust and effective AML assessment is an essential, however often neglected, component of any firm's money laundering defences.
With increasing responsibilities placed upon Board Directors, it is unrealistic and ineffective for them to micromanage a firm’s AML controls and processes. A strong awareness of a firm’s AML culture & effectiveness is essential for Board members to protect the firm and the employees.
The Jersey Financial Services Commission (“JFSC”) handbook states, and other regulators globally concur, that ‘The Board must consider what barriers [including cultural barriers] exist to prevent the operation of effective systems and controls….. to counter money laundering and terrorism’.
Andrew Bailey, Governor of the Bank of England recently quoted that: “Culture begins and lives, and I am afraid dies, at home, with firms”.
He went on to say: “My assessment of recent history is that there has not been a case of a major prudential or conduct failing in a firm which did not have among its root causes a failure of culture as manifested in governance, remuneration, risk management or tone from the top. Culture has thus laid the ground for bad outcomes, for instance where management are so convinced of their rightness that they hurtle for the cliff without questioning the direction of travel.”
The AML 360° Assessment is based on best practice multi-jurisdictional laws, regulatory rules and disciplinary actions.
Assessment findings are analysed and discussed with your Board to identify current strengths and areas which require attention in order to ensure a robust and effective AML culture.
Awareness of your firm’s AML culture & effectiveness is essential in protecting your firm, your Board and your colleagues.
Assessment: A Team Effort!
With increasing responsibilities placed upon Board Directors, it is unrealistic and ineffective for them to micromanage a firm’s AML controls and processes.
- Directors must have an awareness of the “AML big picture”, however an effective firm-wide AML culture is essential in order to ensure a sufficiently robust AML function.
- The Board should promote a healthy AML culture.
- A strong awareness of the firm’s AML culture & effectiveness is essential for Board members to protect the firm and employees.
Responsibility & Liability
Multiple Regulators are holding Board Directors liable for compliance failings:
- United Kingdom – FCA: Senior Managers Regime.
- Jersey – JFSC: Individual Accountability and civil penalties.
- Singapore – MAS: Individual Accountability & Conduct.
- Hong Kong – SFC: Manager-in-Charge Regime.
- Australia – ASIC / APRA: Banking Executive Accountability Regime / Financial Accountability Regimes.
Discharging Responsibility
Board Directors can protect themselves, their firms and their employees by:
- Proactive Management – Assessing their firm’s AML culture, identifying and resolving weaknesses.
- Diligence – Demonstrating to regulators that the Board have done everything skilled professionals could have done to fulfil their AML responsibilities.
Key contacts
Barry Faudemer Chief Executive
Sharon Sargeant Compliance Consultant
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