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The Wolfsberg Group – Developing an Effective AML/CTF Programme
04 September 2020
As of August 2020, Wolfsberg Group has released a statement
encouraging authorities to adopt the FATF guidelines in accordance
to mitigating the risk of AML (Anti-Money Laundering) and to
implement appropriate measures in CTF (Combatting Terrorism
Financing).
Wolfsberg Group has outlined the following key procedures to be
undertaken:
Complying with AML/CTF laws and regulations.
Providing highly useful information to relevant government
agencies in defined priority areas.
Establishing a reasonable and risk-based set of controls to
mitigate the risks of a Financial Institution (FI) being used to
facilitate illicit activity.
In addition to the general guidance provided, Wolfsberg Group
has pinpointed their focus on Financial Institutions (FIs),
detailing five key areas to help improve their AML/CTF
programs:
Assess Risk in Defined Priority Areas FIs should ensure they are consulting all resources in
identifying risk, as opposed to just relying on their countries
jurisdictions to provide transparency on risk in financial crime
areas. FIs should then evaluate the risk of conducting business in
these defined priority areas.
Implement/Enhance Controls Once FIs have identified potential risk, the next and most
important step is to ensure they can protect themselves against it.
This involves incorporating risk and compliance mitigating
controls.
Prioritise Resources FIs should use a risk-based approach to categorize
business that could be deemed high risk. High priority areas should
then be prioritized, to ensure all risk mitigating checks are
completed and business is conducted in accordance with regulation.
In order to have the most effective AML/CTF programs FIs should
also look to integrate developing technologies such as Machine
Learning and Artificial Intelligence.
Engage with Law Enforcement In order to have full transparency and legitimacy in
business, FIs should look to participate in Public-Private
Partnerships (PPP). PPPs allow FIs to easily engage with local law
enforcement, helping to determine potential new threats and
high-risk areas.
Demonstrate AML/CTF Program Effectiveness FI's should articulate to their respective senior
executives and board, both quantitative and qualitative analysis of
their AML/CTF Program. In addition, the country's law enforcement
can provide feedback on how FIs have incorporated effective risk
and compliance procedures to ensure legitimate business.
Wolfsberg Group and the FATF will continue to promote these
practices to prevent anti-money laundering and protect parties in
the trade supply chain against financing terrorism. It's important
for parties in the supply chain to conduct themselves accordingly
to maintain a standard level of transparency and safe trading
practice.
The link to the Wolfsberg Group Notice can be found here.
Post Author: Ravi Amin, Trade Finance Subject Matter Expert, IHS
Markit Maritime & Trade
