As a reporting entity under most Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) regulations you must appoint an able and qualified person as your Chief Anti-Money Laundering Officer (CAMLO). This is essentially the first step to meeting your legal obligations. The role of a CAMLO is significant as they guard your business from the serious consequences associated to AML/CTF non-compliance which could include financial or even criminal penalties, losing your banking relationships, or even going out of business.
Finding the right candidate with AML/CTF expertise is critical to being able to develop and implement an ongoing AML/CTF compliance program for your business. Besides this, what other qualities should you be looking for in an individual that you seek to appoint as your company’s CAMLO?
Here are 5 key aspects to think about when looking to bring on the right person for this vital position.
1. Do they understand your sector?
Find a CAMLO that understands your sector. There are many types of reporting entities and various obligations based on risk associated with your products, services, delivery channels and geography. Their knowledge will ensure that the appropriate level of Know Your Customer (KYC), Enhanced Due Diligence (EDD), Reporting and Record-Keeping, ongoing monitoring, training, and effectiveness reviews are maintained and up to date with your policies and procedures. Measures and controls will be based on your company’s vulnerabilities and risks, so finding a CAMLO with an understanding of your type of business structure and functions enables them to develop and implement an AML/CTF compliance program that effectively fulfills your obligations.
2. Do they possess critical thinking skills?
A CAMLO has many complex duties and an effective AML/CTF compliance program is mandatory by law and regulations. This demands a carefully thought-out risk based program that is tailored to achieve mandated objectives and goals. Cookie cutter programs only work so far, but a seasoned CAMLO with critical thinking skills will be able to gather and dissect the information that is necessary to formulate the proper risk assessment for your business and move on from there and with a plan of action. Critical thinking is vital in many tasks including assessment of inherent and residual risks, drafting and maintaining of policies and procedures, and managing the process of organizing reviews and reports to share with bankers, regulators, examiners, and law enforcement.
3. Are they trustworthy and ethical?
Your CAMLO must be given the right to have full of oversight of your business, with access to all kinds of confidential information, and the authority to request aspects of your operation be changed where needed to meet your regulatory requirements. They must assess and will contribute to the management of your internal and external activities, partnerships, and all other relationships your organization maintains. They must understand the details of these business relationships in order to make appropriate recommendations for enhancements to meet the AML/CTF compliance requirements of your business. Look for a CAMLO that understands matters such as privacy, discretion, and confidentiality. This includes someone that holds business ethics, integrity and trust issues as important elements of their own value system. A professional with knowledge and belief in these business virtues is likely to be vigilant and take their commitment in defending your business from non-compliance issues much more diligently, if or when they occur.
4. Are they a positive influence?
A CAMLO plays a big role in establishing the way your internal and external relationships are ultimately informed and managed in regards to policies and procedures. They must effectively guide staff through communication and training in order to get them on board as part of your lines of defense. They must distribute and enforce many of the measures and controls that define the way you and third parties do business together, while also ensuring the necessary KYC, EDD, reporting and record-keeping, training, and ongoing monitoring is implemented for all your relationships. Your CAMLO must have a direct line to your Board or most senior level management in order to effectively and efficiently communicate matters that relate to AML/CTF aspects of your business. You want to find a CAMLO that is able to influence stake holders and that recognizes the importance of how their administration is perceived. A CAMLO that considers relationship building and themselves as an influencer can inspire your staff, vendors, and other connected parties to relate, to share, and to team-up where needed to essentially implement the necessary AML/CTF measures and controls to meet regulatory requirements.
5. Do they have a passion for learning?
The laws are ever changing, technology and systems are constantly evolving, criminals and nefarious organizations are incessantly challenging the fringes of regulated entities. New products and services are rapidly being brought to markets, and with the evolution of globalization and the internet, new financial crime schemes are more insidiously penetrating vulnerable businesses. Find a CAMLO that is a visionary, who thinks ahead and plans based on what is upcoming while reflecting on what has happened in the past. Someone who stays up to date with emerging trends, that has a desire to learn and an appreciation for innovation. This type of person is likely to seek new tools that could be implemented for the development and maintenance of a robust AML/CTF compliance program. If your CAMLO has a passion for learning their enthusiasm will benefit your business by keeping you in compliance and less of a target for the bad actors.
While there are many other aspects to consider when appointing your CAMLO, considering these 5 key aspects will surely help you find that right fit!
Alternatively, you may be thinking of designating yourself as the CAMLO. Be forewarned, it requires extensive work, preparation, and ongoing upkeep to ensure your business does not fall into non-compliance of AML/CTF regulations. KYC2020 offers a quiz to help you assess your basic knowledge of AML/CTF laws and regulations by your business type.
Take the quiz and find out whether you should even consider putting on the CAMLO hat and taking on the additional responsibility and liability.