Anti Money Laundering (AML) An Overview for Staff Prepared by MSM Compliance Services Pty Ltd
Who Are MSM Compliance? MSM is a national professional services business focused on the general insurance industry. Your company has engaged MSM to assist in the management of its obligations as a holder of an Australian Financial Services Licence. MSM helps to ensure that you and your company comply with your AFS Licence obligations with the least disruption to your core business.
Why Are You Reading This? To provide you with an introduction to our approach to Anti Money Laundering. It will present you with a synopsis, but not the detail. You should still take the time to read the full Anti Money Laundering Section within the Compliance Policy & Procedures.
What Is Money Laundering? Money laundering is defined as: “The process used by criminals to disguise the origin and ownership of the proceeds of their criminal activities in order to avoid prosecution, conviction and confiscation”.
Our Approach The Board and senior management commitment to an effective AML program. Money Laundering Risk Assessment Processes to identify and report on suspicious activities. Implement a “Know Your Client” approach. Training all staff on AML. Retain documents for minimum 5 years to enable tracking of any historical issues.
Anti Money Laundering (AML)AML Legislation Enacted around the world The two most relevant for our business are Australia & UK. Australia - Anti Money Laundering and Counter Terrorism Financing Act 2006. UK - Anti-Money Laundering / Financial Crime, and Sanctions regulations.
AML Process A Risk Based Approach – What risk does our business face of becoming involved in Money Laundering? Low Risk based on factors below –Clients in known terrorist countries – No. –No AML legislation in the country - No. –Industry prone to money laundering – No –Dealing via unknown intermediaries – No –Money Laundering prevalent in Aust - No
Our AML Process Based On –A “Low Risk” assessment to Money Laundering. –Our business is not required to meet any specific systems by Aust. AML Law. –Commonsense and Best Practice. –We do not check clients on Money Laundering databases that hold names of “at risk” entities.
Know Your Client – AML Triggers False identity, e.g., Temporary/false addresses Early cancellations Reluctance to prove evidence of identity. Lack of reason to take out a policy Use of third parties to place cover Payment to clients that appear to have no connection with the customer Large cash payments
Know Your Client - AML Triggers Corporate clients where we encounter difficulties and delays in obtaining financial information Cover for goods in transit to or situated in countries where terrorism, the production of drugs, drug trafficking or organised crime may be prevalent Substantial premiums paid by customers with limited means.
Dealing Via Intermediaries Intermediaries make assessment of risk of end client very difficult. Therefore we must rely on the bona fides of the intermediary. We should only deal with intermediaries who: –Are AFS Licenses or, –We have met and assessed as operting legitimate and legal businesses.
Suspicious Transactions – AML Triggers Difficulty in obtaining information on the policyholder or other parties involved; Covers set up and then cancelled for no reason; Transactions involving intermediaries, in different jurisdictions for no discernible purpose; Premium Funding, return premiums, overpayments or claim payments where a third party benefits; Transactions where insurance does not appear to be the primary object or make no economic sense; Over-inflated values (e.g. on jewellery/fine art).
Reporting and Training Processes All suspicions on Money Laundering are to be reported to our Compliance Officer. The Compliance Officer will record such items in our Compliance Breach Register. The Compliance Officer will discuss what action to take with the Responsible Managers. All new and existing staff staff should complete this AML Training Overview.
Review & Updates Our Anti Money Laundering approach will be reviewed on an annual basis as part of our Business Planning process or after any positive identification of our unknowing, actual or potential involvement in a Money Laundering activity. Any changes will be advised by management either via Email or at our regular Staff meetings.
In Summary You should Read the full AML Section in the Compliance Policy & Procedures. Identify the Compliance Officer (CO) and Responsible Manager (RM) on our Organisation Chart. Be aware of the risks of Money Laundering. Inform the Compliance Officer if you suspect we have or are likely to become involved in a money laundering transaction.
Where To From Here? Be alert to the risk of Money Laundering within the business and if you require further clarification discuss with our Compliance Officer.