AML Responsibilities for Firms

Compliance Officer

Where appropriate to the size and nature of the business, firms must appoint a money laundering compliance principal (MLCP) and that individual must be on the board of directors (or equivalent management body), or a member of senior management, where appropriate to the size and nature of the business. Sole practitioners with no employees are exempt from this requirement.

Firms must also appoint a nominated officer (Money Laundering Reporting Officer (MLRO)), to receive internal suspicious activity reports and who assesses whether a suspicious activity report should be made to the National Crime Agency (NCA).

All firms currently have an MLRO under MLR07. Where this person is sufficiently senior then they can act as MLCP and nominated officer.

If the MLRO is not sufficiently senior and an MLCP must be appointed, the MLCP’s name must be communicated to AIA within 14 days of first appointment to aml@aiaworldwide.com.

Employee Screening

Where appropriate to the size and nature of the business, firms must assess the skills, knowledge, conduct and integrity of those employees who are involved in identifying, mitigating, preventing or detecting money laundering and terrorist financing in the course of business. This includes those staff whose work is relevant to compliance with the regulations.

You must also regularly train your relevant employees in how to recognise and deal with transactions and other activities which may be related to money laundering or terrorist financing.

Independent Audit Function

Where appropriate to the size and nature of the business, firms must establish an independent audit function to examine and evaluate the effectiveness of the firm’s AML policies, procedures and controls Sole practitioners with no employees are exempt from this requirement.

The regulations do not state that the independent audit function must be external to the firm, but it should be independent of the function being reviewed.