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Ongoing AML/CTF Compliance

Having in place your AML/CTF Program is not the end of the story. A reporting entity has ongoing compliance obligations and must comply with its own Program. A summary of some typical obligations can be found here. Below are some common issues that we have observed with respect to ongoing AML/CTF requirements.

ML/TF Risk Assessment

Inadequate risk assessment has often been observed. While the Part A Program will typically at least provide a discussion of the risk assessment, such general discussion is likely to be insufficient, as the ML/TF risk assessment must enable a reporting entity to actually risk rate its customers.

Having adequate ML/TF risk assessment is not only a distinct requirement in itself, it also has significant flow-on effects on the rest of a reporting entity’s AML/CTF compliance framework. The entire Australian AML/CTF regulatory framework, after all, is risk based. The level of customer due diligence, the appropriate level of ongoing customer due diligence all depends on the result of the ML/TF risk assessment.

AML/CTF Compliance Training for Staff

Staff AML/CTF risk awareness and compliance training can often be lacking. It is not uncommon for a Program to provide for the minimum training to be undertaken by a reporting entity’s staff, with additional training if required by the AML/CTF Compliance Officer. However, in practice, the requirements in the Program have often been ignored.

This area often interacts with other requirements that the reporting entity may be subject to under another regulatory framework. For example, a reporting entity that holds an Australian Financial Services Licence (AFSL) has a general obligation to ensure that its representatives are adequately trained. Training undertaken to satisfy the requirements under the AFSL regulatory regime is not automatically relevant to the reporting entity’s compliance with its AML/CTF risk awareness training obligation under the AML/CTF Rules.

Transaction Monitoring Program and Suspicious Matters Reporting

The transaction monitoring program is often inadequate, if any at all. A sound transaction monitoring program is not only required as an ongoing customer due diligence obligation, it is also vital to ensuring that the reporting entity can fulfill its obligation to report suspicious matters to AUSTRAC under s 41 of the AML/CTF Act.

Please see here for further information on a transaction monitoring program.

How We Could Help

How we can assist depends on your requirements and preferences. Typically, it will depend on a range of factors, such as the nature of the designated service you provide, the size and volume of the business and the available AML/CTF compliance resources within your team. We could potentially help with the following matters:

  • Provide AML/CTF compliance inductions and further training more specifically tailored to the particular job functions;
  • Provide regular compliance review and preparing reports for the board and senior management;
  • Review the compliance reports prepared by your team and attend meetings with the board and senior management;
  • Liaise with AUSTRAC and your banking partners on your behalf with respect to AML/CTF compliance matters; and
  • Provide ad-hoc support to your team.

To find out more about how we could potentially collaborate, simply click here to book an obligation-free virtual coffee with our founder and director Xiaoshu Liu.