Anti-money laundering compliance board report
Published
The Board (or equivalent Senior Management Body) must monitor and manage compliance with anti-money laundering (AML) policies, controls and procedures (PCPs). To support the board with this the Money laundering reporting officer (MLRO) must submit an annual report setting out:
Changes to the Anti-Money Laundering/Counter-Terrorist Financing (CTF) risks of the practice.
Improvements that are planned for the coming year.
Progress on any past improvements.
The results of any internal auditing.
Resourcing concerns/considerations.
Any interactions with their supervisor.
AML staff training undertaken.
Key information, for example, regulatory changes or notable publications/guidance from AML authorities; and,
Other information, for example, trends, deficiencies, and lessons relating to SARs made by the Firm.
More frequent reporting may be determined appropriate by the Board.
The template is not exhaustive and covers topics considered key contents of an Annual MLRO Report, this template is designed to provoke ideas and considerations.
Remember that the MLRO report is not the sole communication between compliance and senior management. Rather, it's a comprehensive summary of all communications throughout the year. Any significant issues, regulatory breaches, or emerging risks should have been raised with the board and senior management before the report was presented to them. So, there should be no surprises. Consequently, it should serve as a comprehensive summary of previously communicated information.
Top tips:
Outline MLRO duties, team structure, and framework of who is responsible.
Highlight new risks and changes to the company's risk profile.
Evaluate the AML/CTF control framework, noting strengths and weaknesses.
Address residual risks, weaknesses, and any breaches transparently.
Propose actionable recommendations, specifying required resources and support.
As a side note: the board should demonstrate that it has given proper consideration to the report and appropriate action to remedy any deficiencies highlighted have been undertaken.