Appointing an Anti-Money Laundering Compliance Officer (AMLCO) and Money Laundering Reporting Officer (MLRO)/Deputy Money Laundering Reporting Officer (DMLRO) is essential for remaining compliant with the ever-updating Cayman Islands Anti-Money Laundering Regulations (AMLRs). However, not all AMLCO/MLROs are created equally. When selecting the right fit for your entity there are some basic, but often overlooked, things you should consider.
Think about your board
Ask this simple question with your board in mind: does this officer have the requisite skills and qualifications to make sound recommendations that the board will act upon with confidence? What qualifications and experiences set them apart? A board will expect AMLCOs to have Know Your Client (KYC), Anti-Money Laundering (AML) and regulatory compliance experience. Additional compliance certifications, such as a certification from the Association of Certified Anti-Money Laundering Specialists, are helpful in establishing credibility. Confirm whether the officer has practical experience, like drafting Suspicious Activity Reports (SARS) or liaising with regulators and other authorities.
How will your officer remain abreast of the avalanche of AML regulatory developments?
In addition to an astute and informed officer, look into the compliance infrastructure of the service provider itself. Does the service provider offer consistent and timely updates on regulations and on key amendments to regulations and guidance notes? Consider if the team of experts has access to various AML-specific journals and attend events sponsored by, for example, the Association of Certified Anti-Money Laundering Specialists.
How will the officer work in concert with the fund manager and staff?
Outsourcing some or all appointments should be considered and the officer may suggest a soft audit. This consists of reviewing the efforts to date and providing the directors and the manager with a report detailing any deficiencies identified. The directors should determine whether they have the capacity, resources, and requisite experience in-house to exercise the relevant functions. An AMLCO's statutory duties include ensuring the AML regulations are adopted by the fund and to function as the point of contact with competent authorities such as CIMA and the FRA.
Ask about Covid-19
Right now, fund managers should be in contact with all engaged service providers to ensure there are no delays in the ability to report suspicious activity and target matches on a sanctions list to the MLRO/DMLRO.
During these unprecedented times, the fund and its providers must remain alert due to the increased risk of fraudulent transactions and the distribution of malware used to impersonate government agencies, banking institutions and the like. Appropriate and diligent handling of Covid-19 now demonstrates your AMLCO/MLRO can handle other challenging situations down the line.
Originally published 23 July, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.