DIA Regulatory Findings Report 1 July 2019 – 30 June 2020
Areas for improvement and 4S AML’s observations:
Inconsistent implementation of AML/CFT programmes: Written AML/CFT policies, procedures and controls are not always implemented consistently or effectively. Whilst some reporting entities have technically compliant documentation, they are unable to demonstrate effectiveness. You need to be able to walk the walk, not just talk the talk.
Generic templates: The use of generic templates for both risk assessments and AML/CFT programmes remains an issue. Your risk assessment and AML/CFT programme must be tailored to your business and your ML/TF risks.
Registration with goAML: Many reporting entities have still not yet registered for goAML with the FIU. Those reporting entities that have not registered primarily comprise law firms, accountants and real estate agents. You should ensure your Compliance Officer (and Deputy) have registered for goAML so they are able to submit SARs and PTRs within the required timeframe. If you’re registered, you’ll receive periodic useful updates from the FIU via the secure portal. If you want to learn more about SARs, click here https://www.dia.govt.nz/AML-CFT-Financial-Intelligence-Unit-Monthly-Report---March-2021
Unidentified/risks not understood: ML/TF risks that are not fully identified or understood remains an issue for some reporting entities. There is also concern that the risks identified in the Risk Assessment are not evident in training material and that staff involved in implementing the AML/CFT programme have low knowledge of the reporting entity’s ML/TF risks. Keep your key documentation current and ensure all relevant staff are commensurate with your Risk Assessment and Compliance Programme – involve them and ask your colleagues to help you identify new and emerging risks. Be able to evidence regular training of ALL your senior staff, your compliance team and all staff with AML/CFT duties. Include all your client facing staff. Train your reception staff on the basics including SARs, ID&V basics and large cash transactions. Keep comprehensive training records which evidence all training undertaken. 4S AML can tailor a training session for your staff on your Risk Assessment and Programme. Please contact us to book a session.
Unidentified/unverified sources of funds (SoF) or sources of wealth (SoW): Higher-risk clients, activities and transactions are not consistently being identified, verified and monitored. EDD is a requirement for higher-risk clients and where certain higher risk factors are present. EDD includes identifying SoF/SoW and obtaining evidence to prove the source. Do not act or transact if you don’t have adequate risk-based verification – just don’t go there. Andrew Simpson did and he went to jail. On-going monitoring of clients and their transactions should not be overlooked. Ensure you have an effective escalation process so that concerns can be raised and acted upon quickly. If a transaction turns sour, you need to be able to dig out that file note that explains the rationale for your decisions.
