In last week’s blog we looked at the overall responsibilities of the Money Laundering Reporting Officer
This week we look at the administrative aspects of the MLRO’s role.
It is very important to keep a comprehensive record of all Suspicious Transaction Reports (STRs) received by the MLRO, including:
- the reasons, in writing, for decisions made as to whether the STR is sent to the Garda/Revenue or not.
- It is also strongly recommended that all verbal discussions and external professional and legal advice obtained regarding suspicions, are fully recorded.
Internal Quality Control
The guidance from the CCABI places considerable responsibility on the MLRO implementing and maintaining internal controls and risk management around Money Laundering and Terrorist Financing.
- As part of AML compliance, firms must carry out independent AML Compliance Reviews to assess the adequacy of their AML systems and controls;
- External reviews are not always necessary but hiring an external expert who carries out these reviews all the time will result in a more focused manner and will result in a much better compliance outcome for the firm. If the firm has the capacity, a partner or senior manager not involved with AML policies, controls and procedures could carry out the review, with sample checks each year;
- The MLRO should report formally to other partners and directors in writing every year on the effectiveness of the firm’s AML systems and controls.
Contents of the MLRO’s Annual Report
The MLRO’s report should include the following:
- Executive summary for the year highlighting any serious compliance deficiencies, together with details of the remedial action that has been taken;
- Review the number and quality of internal STRs and consider more focused training where none have been received;
- Number of external STRs submitted to the Garda/Revenue;
- Number of new clients declined because of unsatisfactory information;
- Details of staff training during the year –
- number of AML courses;
- details of new/existing staff attending;
- issues/queries/misunderstandings clarified;
- supporting evidence of AML training and proof of understandingg. documented quiz assessment results with supporting attendance certificates;
- Ensure that evidence is retained of the sample check of Client Due Diligence (CDD) files that were examined as part of the AML Compliance Review to ensure all information is relevant and up-to-date (e.g. identification is still valid, records match that of CRO and RBO websites, all ultimate beneficial owners (UBOs) and directors have been satisfactorily identified etc.);
- Sample check of clients’ AML risk assessments to ensure that existing risk ratings are still appropriate, relevant and up-to-date;
- Check that the AML Policies, Controls & Procedures Manual is up-to date;
- Check that the Firm-Wide Risk Assessment is current and up-to-date;
- Check that employees understand the role of ML and their individual responsibilities; and
- Ensure that recommendations from past internal/external inspections are fully implemented.
Please also go to our website to see our:
- Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
- AML webinar (March 2022) available here, which accompanies the AML Manual. It explains the current legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox.
- letters of engagement and similar templates. Please visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
- ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please contact John McCarthy FCA by e-mail at email@example.com.