Expert Insight to AML Transaction Monitoring and Reporting
This article discusses AML Transaction Monitoring and anti-money laundering compliance reporting for customer due diligence.
What Needs to be Considered for AML Transaction Monitoring?
Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) requires compliance obligations involving ongoing monitoring and reporting.
AML/CFT Transaction Monitoring refers to the ability for a business entity to detect unusual or suspicious activity linked to Money Laundering or Financing of Terrorism (ML/FT).
AML Transaction Monitoring Rules
The Anti-Money Laundering Compliance Officer is responsible for establishing, testing and implementing relevant rules to detect unusual client activity.
These rules will relate to the products and services that the client obtains. The client risk evaluation is also relevant to AML Transaction Monitoring.
Client risk profiling should use a methodology that reasonably informs on the inherent or real risks that the client presents to committing ML/FT.
Record Keeping
AML/CFT Auditors and AML/CFT Supervisors expect business entities to keep record keeping of decision-making.
If your business cannot demonstrate how AML Transaction Monitoring is deployed and managed, a regulatory breach is likely.
AML Transaction Monitoring does not need to be sophisticated. AML Transaction Monitoring compliance requires reasonable policies, procedures and controls that are implemented and effectively managed.
Common Errors
AML Transaction monitoring often cause problems in AML/CFT audits due to lack of testing reliability of thresholds and ‘red flags’ alerts and management of the same.