Best practices for building a strong AML/CFT compliance culture

Best practices for building a strong AML/CFT compliance
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Best practices for building a strong AML/CFT compliance culture

Regulated entities in Singapore must ensure compliance with the AML/CFT laws and regulations. The company must have a strong AML/CFT compliance culture to comply with legal requirements. To build a robust AML/CFT compliance culture, the company has to adopt various best practices. This infographic provides various best practices for building a strong AML/CFT compliance culture in the company.

1. Tone from the Top:

The top management has to set the right tone for compliance-related matters. The dialogue with the managers and staff must be positive and consistent, showing the commitment towards AML compliance. It should define the company’s risk appetite so that risk management revolves around it.

2. Engagement:

The leaders must understand various typologies and the company’s ML/TF risk exposure. Business Risk Assessment helps understand the overall risk carried by the company, and a robust AML/CFT framework should be established by adopting a risk-based approach.

3. Technology Adoption:

Technology plays a crucial role in AML/CFT compliance. KYC, Sanctions Screening, Risk Assessment, Regulatory reporting, Record-keeping, etc., can be automated, leading to more efficiency.

4. Sufficient Resourcing:

The compliance department must have adequate resources to counter the menace of ML/TF. Subject-matter experts, the Compliance Officer, and the team are critical in countering money laundering and terrorist financing risks. An adequate budget must be allocated towards this effort. An ongoing review of the resource requirements helps ensure that adequate resources are always available to counter ML/TF.

5. Compliance First

Compliance should preside over the business interest. High-risk situations must be managed, considering the risk appetite of the company.

6. AML/CFT Program Implementation:

The company must implement the AML/CFT Program and ensure that everyone knows what they are supposed to do and how they are supposed to ensure compliance with the legal requirements.

7. Ongoing Monitoring

The Ongoing monitoring of business relationships helps identify suspicious activities and transactions, which in turn helps fight money laundering and terrorist financing. Independent audit ensures the company’s compliance effort aligns with the legal requirements.

8. Training

The compliance officer and staff must be adequately AML trained on the latest laws and regulations governing the entity, and they must know the ever-evolving typologies related to money laundering and terrorist financing. The front office staff must be trained on various red flags concerning the ML/TF.

9. Record-keeping

Records about customer information, transactional information, suspicious transactions, ongoing monitoring, training logs, etc., must be preserved as per the legal requirements, and they should be maintained in a format where they can be easily retrieved when required by the authorities.