If you work in the finance sector or within the finance department of a company, you may already be familiar with the acronym AML. For those who are not or are looking for more information, this stands for Anti Money Laundering. If you have any involvement in a financial institution or department, this is legislation you will need to become familiar with and quickly.
If you are new to owning a business in this sector or new to heading up a finance department, you may need the help of AML consulting experts to assist you in ensuring you remain AML compliant across your company or institution.
So, what does this mean? How do you remain compliant with legislation? And do you have to do all of this yourself? The answer to the final question is no, and the answers to the first two questions are covered below, along with some tips for choosing the right consultant if you choose to outsource this role.
What is Anti Money Laundering Compliance
Anti Money Laundering legislation is covered under federal law, and although it is covered by multiple laws, it is most often referred to under the Bank Secrecy Act. If your business is not compliant with this legislation, it can lead to considerable penalties, including criminally.
In short, AML refers to the practices, policies, and procedures in place throughout your organization that will ensure that the origins of the money that you are receiving and processing can be verified as legal and legitimate.
Anti Money Laundering legislation has been created to ensure that financial institutions take the required steps to ensure that they are not deliberately or inadvertently assisting offenders of financial crime. This will include regular checks and continuous monitoring of the sources of income moving through your business.
How to Ensure AML Compliance
There are a number of ways to ensure that your business remains AML compliant, including ensuring that your business has written policies and procedures in place relating to AML and AML compliance. Ensure that all staff is fully trained in how to spot money laundering or potential money laundering practices, then have a robust process in place to investigate these suspicions.
You can also implement an AML program to ensure that your business remains compliant with all legislation. This program would then carry out a lot of the manual checks. Having a program in place or one in the process of being put in place is an essential part of demonstrating that your business is AML compliant. If this is not something you already have set up, then you should do so as soon as possible.
You should also ensure that you complete due diligence on all of the customers that you begin working with as part of the Know Your Customer provisions of the law. This can help you to ensure that you are aware of any potential red flags for a particular individual or business to enable you to decide if you are going to pursue that customer or retain them.
You can choose the level of due diligence that you will complete for each of your companies, but you should always be able to demonstrate the policy you have regarding this and how it is working in practice.
You should have a policy in place for the reporting and identification of suspicious activity on the accounts of all of your customers. Again, you can implement a program that will monitor this for you and highlight any potential areas of concern for specialist investigation.
Internal auditing is a large part of AML compliance as it will give your company an idea of where the risk areas, or customers, are. An internal audit will highlight any flaws or weaknesses in your business and AML practices to enable you to correct these areas to always remain compliant.
You will need to ensure that for any and all of the AML practices you have implemented that you keep thorough records of this for each compliance check. It is also essential that you immediately act on any feedback given to your company by either the internal auditors or an external compliance check.
Who Can Check Your AML Compliance
You can choose to employ an AML consulting service to assist your business with compliance in this area. This would be a third-party company that would initially check your compliance levels. They would then provide an initial assessment of where the compliance levels are and any suggestions or legal requirements for improvement.
Choosing an AML Consultant
How you choose an AML consultant may heavily depend on the nature of your business. You will need to ensure that whichever company you choose is fully aware of and supportive of the AML practices within your company.
If you choose a company that can carry out the full internal audit process in addition to AML compliance checks, such as CIC, you can make the entire process more streamlined. It would be best if you also focused on exactly which services are being offered to your business and the price that is being charged.
You should be completely clear on the scope and scale of the compliance review and internal audit that is being completed. This will help to ensure that every aspect of AML compliance is reviewed and mean there should be no surprises if a federal check is completed.
AML compliance should be a main business focus and priority for you, so spending the time to choose the AML consultants you are going to employ is necessary. It would help if you were thorough in checking the company you are looking to employ and check that they will fit your needs.
Checking the success of other financial institutions, they have worked with is a great way of doing this. If you find anything untoward in the checks you are carrying out, it would be worth moving to the next option on your list. With such high penalties for not complying with the anti money laundering legislation, it is not worth cutting corners in this area.