Why Does Your Company Need an AML/CTF Review?

Why Does Your Company Need an Anti-Money Laundering and Counter-Terrorism Financing Review/ Audit?

Reviews or audits can be a headache and feel like another compliance tick box exercise and expense. But truthfully, there are more benefits to Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Review than just compliance. Find out why your company needs periodic AML/CTF Reviews/ Audits in this article.

What is an independent AML/CTF Review/ Audit?

An independent review/ audit is an objective assessment of your AML/CTF risk assessment and AML/CTF program. It checks that you are complying with your program, and it:

  • properly address your company’s money laundering and terrorism financing risks
  • complies with your legal obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)
  • is working as it should.
  • Identifies any areas of non or partial compliance that the business can quickly identify and remediate.

Here is why your company needs Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Reviews/ Audit:

Meet your obligations under the AML/CTF Act

If you are a Reporting Entity (RE) covered under the AML/CTF Act, you are obligated to have Part A of your AML/CTF program independently and regularly reviewed. The size, nature, and complexity of your business or organisation will determine how you do this and how often you do this.

In general, high-risk organisations should have independent reviews conducted at least every two to three years. However, you may need more frequent reviews if your business or organisation has changed significantly or you currently have or previously had difficulties with compliance.

For more information and examples, refer to AUSTRAC’s Independent Review Guidance here.

Protect your business from the risks of Money Laundering (ML) and Terrorism Financing (TF)

An independent AML/CTF review/ audit will help ensure that your company’s AML/CTF policies, procedures, and controls remain up-to-date and properly address the risks of money laundering and terrorism financing in your business.

More importantly, a review will identify any deficiencies in the adequacy and effectiveness of your AML/CTF program so that these can be remediated before your business is exposed to criminal financial activity

Keep up with ever-changing AML/CTF legislation and regulations

The legislation and regulations are constantly changing. As a senior risk professional of a company, it may be hard for you to keep up with or understand what the amendments or changes to the AML/CTF Act mean for the business. A regular, independent AML/CTF review/ audit by a qualified reviewer can help you stay on top of any changes and ensure you continue to meet your obligations.

Improve your AML/CTF processes and controls

Contrary to popular belief, reviewers/ auditors are not trying to catch you out or trip you up. AML/CTF reviewers and advisers are professional people providing you with a service primarily designed to improve your compliance with the AML/CTF Act.

Rather than viewing an AML/CTF review/ audit as a test, consider this review/ audit as an opportunity for you to obtain another person’s view of how well your AML/CTF program and AML/CTF risk assessment are designed and working and how you could improve.

On top of any compliance with the Act, your reviewer will also be looking for areas where you can make optional process improvements to improve your efficiencies.

Address any AML/CTF compliance issues early, while the cost of remediation is low

Like most issues, the longer you leave them, the bigger the consequence (and the cost to fix them). If compliance issues are not identified and addressed early in the regime, the cost to remediate these may be significantly higher. An AML/CTF review/ audit is an opportunity for you to have those issues identified and subsequently corrected while the cost of remediation is still low.

Minimise the risk of negative regulatory attention

If AUSTRAC receives a review report they believe has been completed to a good standard, it will influence their monitoring behaviour. AML/CTF supervisors take a risk-based approach to their inspection program, and a good review (with good outcomes) will likely reduce the need for direct engagement or further regulatory attention.

How One AML can help

As an experienced independent AML/CTF reviewer/ auditor, we can take care of all of your review needs. From pre-reviews/ audits to the full independent review/ audit of your AML/CTF Program and Risk Assessment.

Book a free 15-minute consultation here or reach out to discuss any questions you may have.