What Should An AML Program Include?

What are the 3 main factors to consider in determining AML risk?

Inherent BSA/AML risk falls into three main categories: (1) products and services, (2) customers and entities, and (3) geographic location..

How do you perform an AML risk assessment?

The development of the BSA/AML risk assessment generally involves the identification of specific risk categories (e.g., products, services, customers, and geographic locations) unique to the bank, and an analysis of the information identified to better assess the risks within these specific risk categories.

How do you mitigate AML risk?

Understand and mitigate AML risks with network visualizationVisualizing connections to a politically exposed person.Understanding the ownership structure of a beneficial owner.Knowing more about the originator / beneficiary in a correspondent banking system.

What are the four key elements of an AML program?

There are four pillars to an effective BSA/AML program: 1) development of internal policies, procedures, and related controls, 2) designation of a compliance officer, 3) a thorough and ongoing training program, and 4) independent review for compliance.

What are the objectives of AML guidelines?

The objective of KYC/AML/CFT guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities.

What is a high risk customers AML?

Higher Risk Customers are those who are engaged in certain professions or avail the banking products and services where money laundering possibilities are high. Financial Institutions conduct enhanced due diligence (EDD) and ongoing monitoring for the higher risk customers.

What is AML program?

An anti-money laundering (AML) program is a set of procedures designed to guard against someone using the firm to facilitate money laundering or terrorist financing.

What are the 3 stages of AML?

There are usually two or three phases to the laundering: Placement. Layering. Integration / Extraction.

What are the 4 pillars of AML?

For years, financial institutions have operated under the maxim that an effective anti-money laundering and Bank Secrecy Act compliance program (collectively “AML”) rests upon four pillars: (1) written policies and procedures; (2) a designated AML compliance officer; (3) independent testing of the institution’s AML …

Who is subject to AML?

The MLCA’s money laundering provisions apply to all US persons and foreign persons when (1) the conduct occurs in whole or in part in the US; (2) the transaction involves property in which the US has an interest pursuant to a forfeiture order; or (3) when the foreign person is a financial institution with a US bank …

Who is required to have an AML policy?

1. What is an AML Compliance Program required to have? The Bank Secrecy Act, among other things, requires financial institutions, including broker-dealers, to develop and implement AML compliance programs. Members are also governed by the anti-money laundering rule in FINRA Rule 3310.

How do I make an AML program?

The FFIEC Manual clearly laid out the four key pillars of an AML program: Designation of a BSA Compliance Officer; Development of Internal Policies, Procedures, and Controls; Ongoing, Relevant Training of Employees; and Independent Testing and Review.

What should anti money laundering program include?

The basic processes in a good AML Compliance Program include:Internal operations regulations.User vetting and processing policies.Account reviews and reconciliations.Transaction monitoring and detection.Reporting protocol in case of illegal financial activity.

What is risk in AML?

risking refers to the “phenomenon of financial institutions. terminating or restricting business relationships with clients. or categories of clients to avoid, rather than manage, AML/ CFT risk in line with the FATF’s risk-based approach.”

What are the five pillars of an AML program?

A financial institution’s AML program must now address, at a minimum, these five pillars:a system of internal controls;independent testing;designation of a compliance officer or individual responsible for day-to-day compliance;training for appropriate personnel; and.More items…•