The AML/CTF Act adopted in 2006 places several obligations on businesses. These obligations are put in place to protect both the company and the economy from financial harm. One such obligation is the AML independent review.
Having an independent review of your AML program is a mandatory procedure within the country. And it is easy to fulfil with the right review partner.
Wondering what goes into an independent review. We have answered below.
What Is an Independent Review?
An independent review is an AML program part A assessment. The review ensures the health of your ML/TF risk assessment.
The AML and CTF compliance is in two major parts: Part A and B. You may submit both parts to be reviewed. But only Part A is mandatory.
Part A involves the strategies to identify the potential ML/TF risks your business may face. It also extends to include mitigation procedures and verifies that your program functions as it should.
Part B of your anti-money laundering and counter-terrorism financing majors on the identity of your customers and beneficial owners. This speaks to the processes you have in place to verify the identity of your customers.
Who Can Conduct the Review?
As part of AML/CTF reporting obligations, businesses have to ensure that their reviewers meet the guidelines set by AUSTRAC.
Here is what you should keep in mind when picking the right review partner:
- If the reviewer is a member of a professional association that sets standards for its members
- The reviewer’s relationship with the people who designed the AUSTRAC risk assessment
- If the reviewer understands the AML/CTF obligations and knows how to apply them concerning your business
Businesses can select anyone to conduct their AML/CTF check. As long as this person:
- Was not a part of the team that developed your AML/CTF program and has no part in implementing it
- Knows your business
- Has a clear understanding of the ML/TF risks
It is up to businesses to ensure that the reviewer is independent and will carry out an impartial review.
Frequency of Independent Reviews
How often you should submit your business for an AML audit is not a clear-cut answer. Several factors go into deciding this. But the government has left it to you to decide.
Some factors that affect frequency include:
The Level of ML/TF Risk
Your level of risk should be the first thing you consider. This will be decided by your customers and the nature of your business. An organization with a high AML/CTF risk must review its program at least every 2 to 3 years.
Size and Complexity of Your Business
The size of your business is another factor to consider. If you run a big organization, you must conduct your Part A AML/CFT review more frequently than a smaller business.
Independent Review Deliverables
An independent review‘s end goal is to showcase your AML program’s health. Some of the deliverables you should walk away with include:
- How effective your AML/CTF program is
- If your program adheres to the AML/CTF law
- How well have you implemented past recommendations
Reviewing Part A of Your AML/CTF Program
When it comes to protecting your business from financial harm, an independent review is the way to go. Partnering with a qualified independent reviewer will ensure your program adheres to the law. And it can help you weather the storm.
At RCA Group, we have helped over 200 clubs and pubs with their AML/CTF reviews.
Contact us to hear what we can do for your business.