As part of preparations for the forthcoming MoneyVal visit, the GFSC at its annual industry presentations provided feedback to firms for areas that have been earmarked by MoneyVal for evaluation; along with the importance of ensuring that industry and the regulator work together collaboratively in ensuring that the Bailiwick is adequately affirmed in its overall assessment.

An increased focus for the forthcoming visit will be on the effectiveness of supervision and AML controls in the Bailiwick, including how the risk-based approach works in practice. Moreover, how financial institutions understand the risks to their business, and that they can adequately demonstrate that they know their clients; and can apply enhanced due diligence/enhanced measures to the extent required under the regulatory AML/CFT handbook.

The importance of Governance and Culture within firms was also outlined, including taking into consideration a long-term approach to client relationships, with an emphasis on quality over quantity; together with the need for an integral approach to staff retention that aids business continuity and risk management.

Questions outlined for firms to consider include the following:

How risky is your business?

What are your controls?

Are you confident in your controls?

What is your understanding of the risks in your sector?

How is your risk appetite set and applied?

Is your Business Risk Assessment effective and relevant to your business?

How do you monitor AML risks?

Do you understand your clients?

Are you prepared for a GFSC visit/Moneyval selection?

Are your risk assessments appropriately documented?

Is AML training relevant, and effective for your business?

Independent Audit - Assessing the Risks

The GFSC in its update to industry made reference to moving towards implementing independent audit requirements. This will bring further credence to businesses looking to ensure a robust AML/CFT framework is in place (including the 'Three lines of defence' model), together with assisting boards with feedback on corporate governance which are key regulatory requirements in the effectiveness of combating both financial crime, and the financing of terrorism.

Whilst more details around the application of this requirement, and its extent against relevant FATF recommendations, are awaited; undertaking an independent review of your business will bring valuable input in managing and mitigating regulatory risk, and providing practical and workable solutions to challenges faced that enable your business to grow and thrive.

Don't be overtaken by events. Stay ahead and get quality assurance for your business. Aspida offers many solutions in the form of compliance effectiveness reviews, corporate governance reviews and independent audits.

For further information on how we can help your business, contact advisory@aspidagroup.com

Mark Chammings is Head of Financial Crime, Aspida Advisory Services Limited www.aspidagroup.com/advisory-services

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