How to Mitigate Your Business’ Money Laundering Risk

In my last blog, I wrote about how to conduct your enterprise-wide anti-money laundering (AML) risk assessment under Regulation 18(1) of the Money Laundering, Terrorist Financing and Transfer of Funds (Payer Information) Regulations 2017.

In this follow-up blog, we’ll explore how to mitigate the AML risk your assessment has highlighted.

Remember the purpose of the AML assessment, as well as the policies, controls and procedures

As stated in the previous blog, the objective of the assessment is to understand the company’s AML risk and put policies, controls, and procedures (PCPs) in place to mitigate the identified risk.

There are a number of PCPs that are mandated by regulation, as briefly outlined below:

  • appoint a regulatory compliance officer – this is the Money Laundering Compliance Officer (MLCO)
  • appoint a designated agent – this is the company’s Money Laundering Reporting Officer (MLRO)
  • make a selection of the employees concerned
  • carry out an independent audit to examine the effectiveness of PCPs
  • ensure that data subjects receive training on money laundering, terrorist financing and data protection
  • perform customer due diligence
  • have a policy and process regarding the use of third-party due diligence investigation
  • have a policy and process regarding record keeping and destruction.

Steps that can be taken to mitigate the risk of anti-money laundering

Once your business has assessed its AML risk and understood the PCPs described above, your risk assessment should outline your business’s plans to address the identified risk, or the steps it has already taken to mitigate the risk. AML.

Below are some possible risks that a business may have identified and suggestions on how this could be mitigated.

Customer risk