14th May 2018
AML Compliance Officer
What Is An
What is an AML Compliance Officer?
In order to oversee internal anti money laundering policies and remain compliant with important regulations, banks, credit unions and similar financial institutions are required to appoint an Anti Money Laundering (AML) Compliance Officer.
As part of the fight against financial crime, governments across the world require their financial institutions to put in place anti money laundering compliance programs. Implementing AML legislation can be challenging: in the United States, for example, the Bank Secrecy Act (BSA), introduced in 1970, has been amended by numerous subsequent laws, including the Patriot Act. Practically, this means US financial institutions must navigate an increasingly complicated BSA compliance landscape, often involving a significant administrative burden and serious legal consequences. To achieve compliance, it is often necessary to appoint an AML Compliance Officer: a principal figure responsible for overseeing the effective development and implementation of their institution’s AML program.
While all employees should be aware of their company’s AML policy, the AML Compliance Officer is responsible for its implementation at an institutional level. An AML Compliance Officer’s primary professional focus falls on the internal systems and controls that their institution puts in place to help detect, monitor and report money laundering activities to the authorities. Their job is to ensure that their institution is not exposed to criminal risk, and does not inadvertently facilitate financial crime.
The finer details of an AML officer responsibilities vary by country, of course. In the US, for example, a BSA-AML Compliance Officer would liaise with the Financial Crimes Enforcement Network (FinCen), while a UK anti money laundering officer would report to the National Crime Agency (NCA). Broadly speaking, however, AML policies and strategies are often mirrored across jurisdictions, and the practical duties of an AML Compliance Officer will include:
- Assisting with the development, implementation, and maintenance of an anti money laundering program within their institution.
- Ensuring compliance with current AML regulations, and other relevant legislation (e.g the USA Patriot Act).
- Developing and maintaining a risk assessment framework for products and services, clients and customers, and other issues relating to money laundering.
- Keeping and maintaining records of high risk customers, and reporting suspicious activities to the authorities.
- Arranging and implementing inspections and audits from third-party organizations, and making compliance recommendations based on their findings.
- Briefing and reporting to senior management on matters relating to internal AML compliance policies and procedures.
- Overseeing and implementing an ongoing AML training program for other employees.
Given the importance of an institution’s AML compliance program, an AML Compliance Officer is required to be fully knowledgeable and skilled in all areas of financial policy and procedure, and in the methodologies of financial crime. When making the appointment, it is vital that senior management choose a candidate who not only has the ability and expertise to perform their duties effectively but who suits their institution’s unique professional needs.
The ability and dedication of an AML Compliance Officer will shape your AML program, and reflect your institution’s commitment to combating financial crime. With that in mind, when appointing an AML officer, the following factors should inform your decision:
An AML Officer must have considerable experience and understanding of the financial and regulatory landscape, and of relevant risk management strategies. This knowledge and expertise should go beyond internal AML systems and controls, and extend to methodologies of money laundering (and its associated criminal activities), and to the potential risk posed by certain customers and clients.
AML compliance is a constantly evolving field, so your Compliance Officer’s expertise should reflect the current regulatory climate. With that in mind, a variety of industry bodies exist which offer AML certification and training.