(Newswire.net — May 3, 2021) — Money laundering is a crime with centuries of history and has long been a significant threat to governments, financial institutions, and businesses. A business that fails to comply with anti-money laundering (AML) procedures can face a suspension or revocation of business permits and licenses, as well as hefty fines. Most times, this effectively means the loss of your ability to conduct business. It is exactly for this reason that businesses need to put a significant effort to make sure that they are compliant with anti-money laundering laws through an AML compliance program.
What Is an AML Compliance Program?
An AML Compliance program refers to all the steps, efforts, and measures taken by a business [that is used as a money conduit e.g. banks, lending institutions, real estate companies] to flag down any suspicious transactions that may indicate an effort to launder money. The value differs between jurisdictions, but the rules are generally the same- that any transaction, including real estate purchases, is to be flagged if they exceed the limit set by a jurisdiction’s anti-money-laundering laws.
This entails that a compliance officer must perform internal audits, compliance procedure analysis, as well as make the necessary changes and improvements in order to further strengthen the effort to combat money laundering schemes.
Risk Factor and Program Complexity Scaling
There is no such thing as a universal AML compliance program. Just as each business is assumed to be unique, they also require a unique AML compliance program. The higher the risk of exposing your business to money laundering activities, the more complex the compliance program needs to be. Some risk factors include:
- Business relationships and clients, as well as client activity patterns
- Nature of the business, products, services, and delivery channels
- Geographical location
- Employee turnover, rules, and regulations
Compliance Officer
The AML compliance is the person tasked with the effective implementation of all the stipulations under the compliance program such as policies, procedures, training, risk assessment, and program reviews. Take note that it is not the compliance officer’s mandate to conduct a full-on investigation. The law requires only that the compliance officer reports any suspicious transactions (as mandated by state laws) to the appropriate authorities who will then conduct the investigations.
Ongoing Compliance Training Program
Businesses that act as money conduits are required to have an ongoing compliance training program for employees, agents, and any other people who are authorized to act on the behalf of the business in its transactions.
This training program must be made in writing and it must be reviewed and updated periodically. It must also be disseminated to people who have direct contact with clients (such as front-desk personnel and real estate agents) and to people who are involved in client-related transactions (such as sales managers).
Money laundering has been a major threat to the government for centuries. This is exactly why the law takes the AML and its implementation seriously. Businesses need to ensure that their compliance measures are adequate, which is why it’s also important to talk with AML consulting experts to help your business stay AML-compliant.