Money Services Businesses (MSBs) like Bureau de Change, travel agencies and airport retailers are potential targets for money launderers and terrorist financiers. As this has serious implications for your business, keeping up-to-date and fully compliant with Anti Money Laundering (AML) and Anti Terrorist Financing (ATF) legislation is an ongoing operation.
Here are 7 tips that will keep your MSB compliant:
Invest in a computerized record keeping system that is compliant with regulations
If you’re a business still using a manual record-keeping system, you will find it difficult to keep your accounts operational. Currency exchange software can help keep you compliant and has a host of other benefits like stock control, real-time monitoring of profit and loss, and better customer support.
Train your managers on all the regulations for AML and ATF
Keep evidence of your employees’ training in regulatory safeguards, record-keeping and reporting on file. On-the-job training is also excellent for encouraging employee’s to take ownership and responsibility, adding value to their roles and your business.
Put a bespoke AML and ATF compliance program in place and document it
Create a compliance manual that includes KYC (Know Your Customer), KYA (Know Your Agent), KYE (Know Your Employee), systematic record-keeping, automatic sanction-list checks, risk mitigation, and so on. It should also state your adherence to the 24-hour rule and you sanction list checks each time you deal with recurring clients.
Automate your background checks against all relevant sanction lists
You should update your list on a weekly basis, minimum. Your currency exchange software should ideally have a tool for the automatic live check of customer names against multiple international consolidated watch-lists (sanction lists) such as the SDN list (Specially Designated Nationals) by OFAC (Office of Foreign Asset Control) and the OSFI list (Office of the Superintendent of Financial Institutions). Manual systems for background checks are no longer acceptable by banks and/or AML auditors.
Keep good records for reporting and evidence of suspicious transactions
As an MSB, it’s quite usual to encounter suspicious transactions. You must keep good records and keep all evidence of any suspicious transactions so you can provide it to your bank. All suspicious transactions are reportable to the government; you should keep proof of your STR (Suspicious Transaction Report) on paper and electronic format.
Set up an internal audit program
Schedule an internal audit (or risk-assessment program) to take place at least once a year. Ensure you record your findings. It’s a good idea to include the details of the schedule in your compliance manual. If you have currency exchange software, it collects all transactional information in one place where it can be cross-referenced, and will make your internal audits easier to manage.
Be prepared for an external risk audit
Every two years it will be necessary for you to undergo an external audit. This is usually conducted by expert AML and ATF auditors. One of the best ways to be prepared is to have a computerized record keeping system. Work closely with your external auditor and give them access to all the data they need. If you’ve invested in software with an AML Audit facility, this is much easier.
If you have any doubts about your abilities to meet these requirements, we can recommend trusted compliance consultants who can help you put together a compliance program. The referral is a complementary service to our customers.