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WHAT IS AN ANTI-MONEY LAUNDERING STRATEGY

09/09/2021

Whether in the UK, Jersey, Guernsey Mauritius or elsewhere, your regulator [or international standard setters] wishes you to have an AML strategy.

FOR EXAMPLE
  1. JERSEY SAYS:
    • Based on its business risk assessment, the board must establish a FORMAL STRATEGY to counter money laundering and financing of terrorism.
  2. MAURITIUS SAYS –
    • The application of a risk-based approach provides a STRATEGY FOR MANAGING potential risks by enabling financial institutions to subject customers to proportionate controls and oversight
  3. WOLFSBURG SAYS
    • Financial Crime Risk Assessments [FCRA] are one element of the Financial Crime Compliance (FCC) toolkit available to Financial Institutions/Firms (FIs), which can strengthen a FI's compliance framework.
    • The FCRA highlight
      • Key risk areas,
      • How well those risks are managed and support a risk-based allocation of resources to the highest risk areas,
      • As well as the establishment of:

                                 STRATEGIC (more long term) action plans for managing the identified risks and

                                 TACTICAL (immediate workaround) action plans for managing the identified risks.

BUT WHAT DOES THIS MEAN
  • Traditionally (in the past, I hope!!), conventional thinking surrounding AML strategy resulted in narrow and limited thinking (tick box!!).
  • However, Today's REAL THOUGHT LEADERS in the AML space consider more than complying with the law.
HOW TO BE A REAL THOUGHT LEADER IN AML STRATEGIES

So to start, you should ask yourselves

The strategy that goes into an AML program should conside:

  1. How the program supports the growth of the institution;
  2. How the program appropriately manages the risks of money laundering and terrorist financing;
  3. How the program formulates a foundation for absorbing (as a centre of excellence) related financial crime risk management activities;
  4. How the program runs and scales with foreseen and unforeseen shifts in focus and priorities; and
  5. How the program affords regulators a sense of comfort in the institution's approach to combatting money laundering and terrorist financing.

The key components for developing a forward-leaning AML strategy should cover the following:

  1. Clearly stated goals;
  2. Measurable strategic objectives;
  3. A road map for execution; and
  4. A means for tracking implementation, progress, and achieved goals.

These components should be formulated by

  1. The board designated COMPLIANCE (RISK) Officer (MLCO/MLPO);
  2. Presented to the Board of Directors; and
  3. Be supported by any/all business units needed for the shared institutional success.

 The more granular details of the AML strategy

  1. firstly, it should first be driven by the applicable legal/regulatory AML rules
  2. Second, the strategy should begin taking shape as a result of the enterprise-wide assessment of money laundering and terrorist financing risk.
  3. Third, a capabilities evaluation tightens the reality behind the goals and objectives.
  4. Finally, the solicited thought input from key constituents (internal and/or external) formulates a tangible and executable plan.

At the forefront of the road map (the strategic plan's guided forward progress) should be

  1. Well thought out programmatic (policies, standards, models, programs, and initiatives) and
  2. Operational (organizational, process, and enablers) designs.
CONCLUSION
  1. A well-documented strategy,
  • Sets up your institution for compliance success,
  • And aligns your firm's efforts into a common ground for the institution's overall success (in compliance, risk management, operational excellence, efficiency ratio, business growth, etc.).
IF YOU WANT TO DISCUSS YOUR STRATEGY CALL:

Mathew Beale - Chartered FCSI

Principal (Director) - Comsure Compliance Limited, Comsure Technology Limited (the "Comsure Group of Companies")

No 1 Bond Street Chambers, St Helier, Jersey, Channel Islands, JE2 3NP

Direct Tel: +44 (0) 1534 626841 –

Mobile Tel: +44 (0) 7797 747 490 –

Skype: comsurecompliance

mathewbeale@comsuregroup.com

comsuregroup.com

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