Regulatory Alerts2011-08-24 | FPR/DIR/CIR/GEN/01/019 CEXPOSURE DRAFTS OF AML/CFT RISK BASED SUPERVISION (RBS) FRAMEWORK CONSISTING OF AML/CFT RBS MANUAL FOR BANK EXAMINERS' EXAMINATION PROCEDUES;AND AML/CFT RBS REGULATION FOR FINANCIAL INSTITUTIONS
To evaluate a financial institution's AML/CFT compliance in relation to business entities and cash-intensive businesses, follow these steps: 1. Review and assess policies, procedures, and processes for managing risks associated with business entities and cash-intensive businesses. 2. Verify that the financial institution performs adequate due diligence on new accounts opened by such entities. 3. Evaluate how the bank identifies and monitors high-risk business entity accounts. 4. Assess the suitability of the financial institution's system for monitoring these entities and reporting suspicious activities. 5. Select a sample of business entities and cash-intensive businesses from various risk factors, such as high-risk jurisdictions or large amounts of currency transactions. 6. Obtain the relationship reports for each selected entity and review the due diligence information provided. 7. Analyze account statements and specific transaction details to ensure they are consistent with the nature and purpose of the accounts. 8. Based on the examination procedures, determine whether the policies, procedures, and processes are adequate to protect against money laundering and terrorist financing risks. In addition to these steps, consider conducting an on-site inspection of a few branches handling business entities or cash-intensive businesses, to verify the implementation of AML/CFT measures on site. This will give you firsthand information about how well the financial institution is implementing its policies and procedures.