Organising your data as part of your AML-CFT Management

As expected, the launch of the new FIAU Implementing Procedures, retained section 9.5.2 (see below) that was introduced in the original consultation document.

9.5.2 Organisation and Categorisation of Records

To facilitate the retrieval of records and to assist in any compliance monitoring activity conducted by the FIAU or other relevant supervisory authorities, subject persons are to maintain a list of their current business relationships setting out:

(i) the name of the customer and/or customer reference number;

(ii) the risk categorisation of the business relationship (risk rating or risk score);

(iii) the type of service being provided or product being offered;

(iv) whether the customer is a natural person, legal person, a trust or other legal arrangement;

(v) the date of commencement of the business relationship and, where applicable, the date on which it ceased;

(vi) a list of all the jurisdictions that the customer deals with, including the jurisdictions where:

(i) the customer and, where applicable, the ultimate beneficial owner/s reside/s;

(ii) the legal person, trust or other legal arrangement is registered or incorporated, as may be applicable;

(iii) the business or economic activity the customer carries out;

(vii) whether the customer or ultimate beneficial owner is a PEP, an immediate family member or a close associate of a PEP; and

(viii) whether reliance has been exercised with respect to the particular business relationship. A similar list should also be maintained for any occasional transactions carried out over the previous five (5) years and any business relationships that were terminated over the same period of time.

This new section has a major impact on all Subject Persons. Unfortunately, few have yet realised what is written in between the lines.

Clearly the signal is that the FIAU will increase its monitoring role, and evidently it is fair to assume that there will be a shift towards off site monitoring. All it takes is a short email addressed to the MLRO simply saying ‘Please supply information in terms of section 9.5.2’. Gathering such information can be a very lengthy and laborious process. Added to that, the FIAU may also impose a very rigid deadline to comply.

InScope’s AML-CFT Role

Thankfully InScope AML-CFT software has been fully compliant with such requirement since March and in fact this report is a standard report maintained by the system and easily available both on screen or exported as an Excel document.

One can note that in their original request, the FIAU will accept a reference number, rather than being supplied with the name of the client. InScope maintains dual record under both reference number and client’s name. Data to the FIAU can then be given supplying only reference number without disclosing clients’ names.

The comfort for the MLRO of a Subject Person adopting the InScope AML-CFT software, is that upon receipt of a request by the FIAU, he/she know that it is just another day since the information can be supplied within seconds. 

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