Cassie Palaniandy

Compliance Consultant

Indeed, MLROs are personally liable under the regulations by virtue of their prescribed positions and their employers are businesses who are profit-driven. It's not the most perfect setup to begin with and often may lead to MLROs feeling isolated in their role.

Reading the Royal Court's verdict in the case involving the MLRO of a well-known Guernsey bank for allegedly failing to report a transaction in the course of his employment as an MLRO makes me feel uneasy. It was such a close call and unfortunately very often such a process affects not only the MLROs but their loved ones as well. It forces one to ask oneself the following questions: Can it happen again? What can I do to protect myself? Is my career over?

As an MLRO, I am very much aware that for me to discharge my duties efficiently, I need to depend on factors which are not always within my control i.e. the employee who needs to make a disclosure, the board members who need to understand the reason why a certain business relationship must be terminated or my request for additional resources and the client relationship manager who should not be tipping off the client. Many of us could relate to the findings in Jakob International Inc. v HSBC Private Bank (CI) Limited which confirmed that once a financial institution has demonstrated its suspicion, the burden of proof then shifts to the client and were reassured that this was maintained in Liang v RBC Trustees (Guernsey) Limited. As an MLRO, my key takeaway from Liang is that an MLRO must be prepared to attend Court and be cross-examined about the basis of his or her suspicion. It begs the question: Is the role valued, is the risk versus the reward aligned with the level of accountability expected from the role?

Managing the expectations of the client without tipping off where �no consent' has been received from the Financial Intelligence Service is a situation which many MLROs can relate to. While in such cases the Court made it clear that it was up to the client to prove that the funds have not been derived from criminal activity, in practice it's not as straightforward. Very often, the result is dormant funds and a lengthy and somewhat frustrated communication between the client and the client relationship manager. Surely, that's not the resolution we were looking for?

If I were to interview for a position as MLRO today, my questions to any prospective employers would include: how would you empower the MLRO in his or her role? And how would you protect or support the MLRO in the event of any prosecution? I would go as far as to request a copy of the policy for the former prior to accepting any job offer.

At Aspida, I am surrounded by colleagues who also act as MLRO and this provides a platform to discuss how best to address the challenges which may arise in the course of our work. It also provides a pool of knowledge and experience from which each and every one of us can at Aspida draw from. More importantly, it does not make me or my colleagues feel isolated in our role as MLRO. If you are looking for support in your role as MLRO or you are a business looking for ways to support your MLRO, please contact Aspida to find out how we can help you.

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Aspida Insights is where we draw on our knowledge, experience, and expertise in key business areas such as compliance and risk management, regulation, and corporate governance to offer our thoughts, forecasts, and advice on a range of topical issues or areas of client concern.

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