Guide To Build An AML Compliance Program Training Ppt

Slide 1

This slide depicts a three-step guide for building an AML compliance program for organizations. The steps are: Forming an organizational environment, conducting a risk assessment, and implementing organizational measures.

Slide 2

This slide highlights the three necessary elements for creating an organizational environment. These elements are: corporate culture, corporate strategy, and management support. 

Instructor’s Notes: 

• Corporate Culture: To effectively build an AML compliance culture and integrate it into daily operations, it is essential for the leadership of the organization to communicate corporate culture and expected behavior. The senior management must deal with money laundering regularly, and significant instances of non-compliance in money laundering violations should be brought to their notice
• Corporate Strategy: The second component is to include AML in the business or risk strategy of the organization. This strategy should clearly emphasize the risks to the organization along with corporate culture and expected behavior towards achieving their risk management goals
• Management Support: This is vital since the organization's managers are responsible for ensuring that the tone set at the top is followed in day-to-day operations. Management communication should be clear and presented in such a way that everyone can understand

Slide 3

This slide discusses the steps to conduct an AML Risk Assessment. These steps are identifying inherent risks, evaluating the internal measures, and determining the residual risk. 

Instructor’s Notes: 

• Identifying the inherent risk: The inherent risk is the vulnerability to the risk of money laundering in the absence of a controlled environment. Assessments are done across categories to determine the inherent risk. Common categories include clients, products & services offered, distribution channels, geographies
• Evaluating the internal measures: Internal controls must be analyzed to see how well they mitigate overall risks. To ensure compliance with the relevant AML regulation, controls are used. AML controls are typically evaluated in relation to many control areas, including employee training, corporate governance, policies and procedures, monitoring and controls, and detecting & submitting SARs (Suspicious Activity Reports)
• Determining the residual risk: The risk that is still present after the inherent risk has been mitigated is known as residual risk. It is arrived at by establishing a balance between the degree of inherent risk and the overall effectiveness of the risk management procedures. A three-tier rating system is generally used to assess the residual risk on a scale of high, moderate, and low

Slide 4

This slide discusses the last step of building an AML compliance program which entails the implementation of organizational measures. There are four main pillars that should be considered, which are: Policies, procedures, & controls, AML compliance function, independent audit, and employee training program.