AML/CTF programs are vital in identifying, disrupting, and preventing money laundering and terrorism financing. This protects your business or organization from criminal activity. Your AML/CTF program must show how you address the money laundering and terrorism financing risks your business or organization may reasonably face. You must develop and document the policies, procedures, and controls you use to identify, mitigate and manage those risks. Your AML/CTF program must be risk-based. This means it must take into account the likely level of risk of your business or organization being used for money laundering and terrorism financing, based on its size, nature, and complexity, taking into account:
- who your customers are
- the services you provide
- how you deliver those services
- the foreign jurisdictions with which you deal.
There are two parts to an AML/CTF program. Part A must include processes and procedures to help you identify, mitigate and manage the money laundering and terrorism financing risks that you may reasonably face. Part B is focused on the procedures for identifying customers and beneficial owners including those that are politically exposed persons (PEPs), and verifying their identity. There is no ‘one-size-fits-all’ AML/CTF program. Each reporting entity is different and has its own unique set of money laundering/terrorism financing risks. You must develop a program that is tailored to meet your specific needs, risks and characteristics. This gives you the flexibility to decide how to meet your obligations and to develop stronger and/or additional controls when necessary.