For businesses operating in high-risk sectors, such as bullion dealers, jewellery and precious stone traders, vintage and luxury car dealerships, maintaining compliance with anti-money laundering and counter-terrorism financing (AML/CTF) regulations is not just a good practice - it's a legal requirement.
If your business hasn’t undergone an Independent Review at the required frequency, you may be at risk of substantial fines and enforceable undertakings by the regulator. Regular independent reviews not only keep your business compliant but also help you avoid ongoing scrutiny from the regulator, ultimately keeping your business off their radar.
An Independent Review is an impartial assessment of Part A and/ or Part B of your AML/CTF program. This review ensures that your program effectively addresses your money laundering and terrorism financing risks, complies with legal obligations and functions as intended. The frequency and scope of these reviews should be tailored to the size, nature and complexity of your business, guided by your risk assessment. High-risk businesses are strongly advised to have these reviews conducted every two to three years to ensure continued compliance and to mitigate potential risks.
Selecting the right independent reviewer is crucial. The reviewer should possess a thorough understanding of your business and its specific money laundering and terrorism financing risks. Importantly, the reviewer must not have been involved in the development, implementation or maintenance of the program they are reviewing. This ensures that the assessment remains unbiased and objective. We recommend that the reviewer be an external party, such as a lawyer or qualified AML/CTF consultant.
Ensuring the independence of the reviewer is essential. Consider whether the reviewer is influenced by those who developed your AML/CTF program. The reviewer must not have performed any functions or measures being reviewed, nor have had a hand in designing, implementing or maintaining the AML/CTF program.
The outcome of an Independent Review should be documented in a detailed report, which includes findings, recommendations and the methodologies used during the review. This report must be presented to senior management and, if applicable, the governing board.
Determining how often these reviews should be conducted depends on various factors, including the size, complexity and risk level of your business. High-risk organisations should conduct reviews at least every two to three years. However, if your business undergoes significant changes - such as mergers, structural changes, introduction of new products and services and/or proving products and services in different jurisdictions - or if you have had compliance issues in the past, more frequent reviews may be necessary.
In today’s stringent regulatory environment, staying compliant is paramount. Regular Independent Reviews are not just about ticking a box, they are about safeguarding your business from potential risks, fines and ongoing compliance scrutiny. For high-value dealers, maintaining this compliance through regular, independent reviews is essential to operating within the law and securing the trust of regulators, customers and stakeholders.
How can WhiteLight AML help you meet your AML Obligations?
If you have any concerns about Independent Reviews, your AML Program or simply want to stay on top of AML compliance, contact WhiteLight AML for an obligation free discussion today.
We work with you to provide actionable insights to help your business prevent ML/TF and stay on top of AML/CTF compliance obligations. To find out more, click here for an obligation free call: FIND OUT MORE
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