AML/CFT Program Management and Structure

What is the primary objective of an AML/CFT program in a financial organization?

What is the primary consideration for a successful AML/CFT compliance program?

Why is it essential to understand the requirements of AML/CFT laws and regulations before developing an AML/CFT program?

What is the role of corporate governance in an AML/CFT program?

What is the main advantage of a risk-based approach to AML/CFT controls?

What is the purpose of applying EDD measures in certain circumstances?

What is the purpose of internal policies and risk-management standards in an AML/CFT program?

Who should be consulted for advice on the complexities of AML/CFT legislation before developing an AML/CFT program?

What is the result of a risk-based approach in AML/CFT compliance?

Why do governments around the world prefer a risk-based approach to AML/CFT?

AML/CFT Program Structure

An AML function can be a standalone department, integrated into other departments, or performed by compliance personnel with other duties.

Importance of Enterprise-Wide View

The AML/CFT program should have an enterprise-wide view of efforts, regardless of organization size.
The program should establish minimum standards to comply with applicable laws and regulations.

Compliance Program Components

Policies and procedures for specific areas (e.g., private banking, trade finance) can supplement the AML/CFT program.
The program should include corporate governance and overall management of money laundering and terrorist financing risks.

Designing an AML/CFT Program

Understanding laws and regulations of all jurisdictions where the organization operates and where customers are located is crucial.
Internal policies and risk-management standards related to the business must be considered.

Risk-Based Approach

FATF and member countries recommend a risk-based approach to AML/CFT controls.
The risk-based approach requires assessing and mitigating risks, with stronger controls for higher risks.
Identifying and mitigating risks involves applying controls such as customer verification, CDD policies, suspicious activity monitoring, and economic sanctions screening.

Benefits of Risk-Based Approach

Flexible: Acknowledges varying risks over time and across jurisdictions, customers, products, and delivery channels.
Effective: Companies are better equipped to assess and mitigate specific risks.
Proportionate: Promotes a practical and intelligent approach, minimizing the impact on low-risk customers.

Learn about the organization and management of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) programs within an enterprise, including the role of dedicated departments and compliance duties. Discover the importance of an enterprise-wide view and minimum standards for AML/CFT efforts.