The AML Compliance Culture
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Know the numbers? Now learn the why.Read the AML Compliance Culture & Governance study notes: short answers, key numbers and the law behind each rule.
- What makes a strong AML compliance culture?
- What are the Board's responsibilities for AML compliance?
- What does the AML compliance officer do?
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Culture
- What is the cornerstone of an AML compliance culture?
- Compliance with AML laws takes precedence over business priorities and profit-making.
- Why must compliance outrank profit?
- If revenue is allowed to trump compliance, the whole AML framework collapses and the firm is exposed to ML/TF abuse and enforcement.
Core elements
- What are the four basic elements of an AML/CFT programme?
- Risk-based internal policies and controls, a designated AML Compliance Officer, ongoing employee training, and an independent audit function.
Governance
- Who must approve a firm's AML/CFT policies?
- Senior management (Article 58C). In CySEC-supervised firms the Board also approves the policy principles, the customer acceptance policy and the procedures manual (CySEC Directive).
- What must the Board do with the AMLCO's Annual Report?
- Review and approve it, and act on any weaknesses it reveals — closing the governance loop.
Board duties
- What are the Board's key AML responsibilities?
- Appointing the AML Compliance Officer, approving the risk management and procedures manual, ensuring resources, and reviewing/approving the AMLCO's Annual Report.
- What does Article 58D require of the Board?
- A named Board member must own the implementation of the AML/CFT Law and the Supervisory Authority's directives — a single point of Board-level accountability.
Controls
- How should AML controls relate to the firm's ML risk?
- They must be proportionate (analogous) to the ML risks faced — stronger controls for higher risk — and reviewed and updated regularly.
Audit
- What is the role of the independent audit function?
- To continually monitor and evaluate the effectiveness of the firm's AML policies and controls, independently of the compliance function it tests.
AMLCO
- What day-to-day role sits at the centre of the compliance function?
- A designated AML Compliance Officer with day-to-day oversight of the compliance function.
Policies
- Where must the firm's AML controls be documented?
- In the risk management and procedures manual, so staff apply them uniformly.
Senior management
- What ongoing duty does senior management have over AML measures?
- To monitor the measures and, where needed, reinforce them — not merely approve them once (Article 58C).