As the Anti-Money Laundering (AML) and Counter Terrorist Finance (CTF) regulatory environment experiences ever stricter scrutiny, your AML and CTF audit model and governance procedures will become subject to greater audit and regulatory interest.
On August 11, 2014, the Financial Crimes Enforcement Network (FinCEN) published an advisory (FIN-2014-A007) which re-iterated the prior warnings from the director that FinCEN, "...will employ all of the tools at our disposal and hold accountable those institutions and individuals who recklessly allow our financial institutions to be vulnerable to terrorist financing, money laundering, proliferation finance, and other illicit financial activity. Indeed, financial institutions should heed this advisory as a warning shot that FinCEN and other federal regulators will be taking more aggressive and frequent enforcement actions against institutions and their leadership in those situations where weak compliance programs lead to illicit activity.”
AML audits must identify deficiencies, gaps, and weaknesses that may exist in the content, controls, and operations of the AML program. A consequence of ineffective auditing may lead to potential AML violations, such as failing to report suspicious activity or collecting proper customer identification documents. An AML enforcement action by a regulator can cost the financial institution a great deal in terms of monetary and reputational impact.
In our paper, "How effective is your AML auditing?" we explore how the framework of a comprehensive AML audit model can support you in preparing for your next AML program audit, looking at:
- What defines an effective AML audit model
- Preparing for your AML audit
- Overcoming your AML audit challenges
- Ensuring future effectiveness
- Why transparency is key
- How to stay compliant