September 22, 2022



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In right this moment’s WH Insights episode, Davinia Cutajar (Associate WH
Companions) talks about AML/CFT audits’ greatest practices.

The very first thing to establish when finishing up an AML/CFT audit
is who ought to perform the audit.

The best candidate is an individual who wouldn’t be auditing his
personal work.

In different phrases, it shouldn’t be the Cash Laundering Reporting
Officer or somebody from the compliance staff. Equally, you wish to
keep away from the audit being carried out by somebody who has a battle of
curiosity, corresponding to the pinnacle of gross sales.

As soon as the precise particular person is recognized, the scope and extent of the
audit must be clearly documented.

Most audits begin with a assessment of the entity’s insurance policies and
procedures handbook to make sure it’s in step with the legislation and any
latest amendments.

Assuming the insurance policies and procedures don’t require revision, a
pattern of buyer recordsdata is reviewed to doc whether or not the entity
is following its personal insurance policies.

You may additionally wish to assessment the Buyer Danger Evaluation,
aside from the due diligence documentation collected, and guarantee
the documentation collected is in step with the entity’s personal
insurance policies and procedures and the legislation and doc retention
coverage.

The entity’s ongoing monitoring obligations in direction of every of
its prospects will dictate how a lot time you dedicate to reviewing
the effectiveness of the monitoring procedures as a result of the providers
being supplied dictate the extent of monitoring to be carried
out.

In my view, no audit is full if it doesn’t additionally assessment
employees coaching information and whether or not the entity’s inner and
exterior reporting channels are identified to employees and are getting used
correctly.

For the reason that scope of AML/CFT legal guidelines is for obliged entities to
report suspicious exercise to the Monetary Clever Unit, no
audit can be full if it didn’t verify whether or not inner
studies have been being raised by the employees to the MLRO, and what the
MLRO was doing with such studies.

This leads me again to my level concerning the MLRO and members of the
compliance staff not auditing themselves, since they might be blind
to their very own shortcomings, or have a vested curiosity in hiding
them.

In conclusion, the audit ought to report findings in clear and
unequivocal phrases, and in my expertise, firms welcome
suggestions for enchancment.

The content material of this text is meant to supply a basic
information to the subject material. Specialist recommendation must be sought
about your particular circumstances.

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