As financial systems grow increasingly
interconnected, the risks of money laundering (ML) and terrorist financing (TF)
continue to evolve. Organizations across the globe are tasked with staying
ahead of these threats by implementing robust Anti-Money Laundering (AML)
measures. In 2024, the AML landscape is shaped by heightened regulatory
expectations, emerging technologies, and new threats, making it critical for
professionals to possess a comprehensive understanding of the framework.
Effective AML compliance hinges on a strong
foundation built upon risk assessment, KYC procedures, and robust CDD
practices. By identifying potential vulnerabilities within business operations,
organizations can prioritize resources and tailor controls to mitigate risks.
KYC and CDD processes are indispensable tools, enabling institutions to verify
client identities, understand their financial behavior, and detect suspicious
activities. AML compliance is a collective effort
requiring collaboration across all organizational levels. From the Board of
Directors to compliance officers and frontline employees, each individual plays
a vital role in creating a secure and compliant environment.
With this blog post, Despoina Charalampous,
an instructor at the institute, provides learners with in-depth education on
the AML regulatory framework and AML compliance culture. She also expands on
the AML Duties, Responsibilities, Risks, KYC, and CDD in 2024. Further, a
comprehensive online course is offered through the IforPE platform,
titled “An
AML Guide in 2024: Assessing Risks, KYC, CDD, Duties & Responsibilities” .
Towards the end of this blog post, you will
find detailed information about the valuable skills and competencies acquired
upon course completion and how they contribute to ensuring the complete
understanding of the AML regulation.
The AML Regulatory Framework
The AML regulatory framework constitutes a cornerstone of the financial regulation, designed to combat ML and TF across jurisdictions. In the European Union, the framework is governed by a series of directives, including the 4AMLD, 5AMLD and 6AMLD. These directives aim to harmonize AML measures across member states, ensuring a robust and consistent approach. In Cyprus, these directives are transposed into national law, such as the AML Law of 2007-2023, accompanied by amendments such as the obligations for Crypto Asset Service Providers (CASP) under Law 98(I)/2023. These laws establish strict requirements for obliged entities, enhancing transparency and accountability in financial activities.
In Cyprus, the AML framework is supported by several supervisory authorities, including the Cyprus Securities and Exchange Commission (CySEC), the Central Bank of Cyprus (CBC), and the Unit for Combating Money Laundering (MOKAS). CySEC oversees compliance for entities such as investment firms, fund managers, and Cyrpto-Asset Service Providers (CASP), utilizing a risk-based approach to supervision. It issues directives, monitors compliance, and evaluates risks linked to money laundering and terrorist financing within the financial system. MOKAS, as the designated Financial Intelligence Unit (FIU), plays a pivotal role in investigating suspicious transaction reports (STR) and cooperating with international counterparts to ensure effective enforcement of AML regulations.
The Sixth AML Directive (6AMLD), set to repeal earlier directives by July 2027, represents the EU's most comprehensive step yet in strengthening its AML measures. It mandates member states to adopt mechanisms that uniformly address ML and TF risks. With an emphasis on criminal liability for entities and a broadened scope for predicate offenses, the 6AMLD underscores the importance of thorough compliance by financial institutions. Additionally, CySEC's evolving directives, such as those for crypto assets and beneficial ownership registers, reflect the need for adaptable AML strategies in response to emerging risks and technological advancements. These developments highlight the continuous evolution of AML regulations to meet the complexities of modern financial systems.
AML Compliance Culture
An effective AML compliance culture is essential for organizations to maintain integrity, trust, and adherence to regulatory standards. It begins with a clear commitment from the Board of Directors (BoD) and senior management, who must prioritize AML measures as part of the organization's core values. This culture establishes a strong defence against money laundering and terrorist financing by promoting awareness, accountability, and vigilance at all organizational levels. When employees understand their roles within the AML framework, it reduces the likelihood of non-compliance and enhances the organization's overall risk management strategy.
A robust AML compliance culture requires well-defined roles, policies, and procedures that are effectively communicated and consistently enforced. Key elements include appointing an AML Compliance Officer (AMLCO) to oversee daily AML operations, implementing risk-based internal controls, and ensuring regular reporting to the BoD. Organizations must also design ongoing training programs tailored to employees' responsibilities, ensuring they are knowledgeable about AML regulations, reporting obligations, and how to identify and respond to suspicious activities. Furthermore, independent audits and internal evaluations are crucial to monitor the effectiveness of AML measures and address any deficiencies proactively.
What is the “An AML Guide in 2024: Assessing Risks, KYC, CDD, Duties & Responsibilities” course and what does it include?
Professionals undertaking this course will acquire significant knowledge on the AML duties, responsibilities, risks and concepts such as KYC and CDD.
- Money Laundering - Terrorist Financing
- What is Money Laundering?
- Stages of Money Laundering
- Methods of Money Laundering
- What is Terrorist Financing
- Differences between ML&TF
- Similarities between ML&TF
- ML&TF risks emanating from crypto assets
- Supervisory Authorities
- Powers of the Supervisory Authority
- AML Regulatory Framework
- MOKAS' powers
- CySEC Directive and Key Updates
- The AML Compliance Officer
- Circular C535: EBA Guidelines
- The AML Director
-The Alternative AML Compliance Officer
- The Risk-Based Approach
- The Primary Risk Factors
- Assessing & Managing Risks
- Reliance on third parties
- Compliance Culture, Duties and Responsibilities
- Compliance Culture
- Stakeholders
- Board of Directors Responsibilities
- Client Acceptance Policy
- Levels of Control Functions
- AML Compliance Officer Responsibilities
- Internal Auditor Responsibilities
- Education and Training
- Assessing and Managing Risks - Risk Based Approach & Risk Scoring
- Risk Based Approach
- Primary Risk Factors and associated risks
- Assessing and managing ML/TF risks
- Information to be collected
- Weighting risk factors
- Financial inclusion and de-risking
- Practical Examples - MOKAS' Report '20-'22
- Customer Due Diligence & KYC, KYT, KYW
- Customer Due Diligence
- Evidence of Identity
- Simplified Customer Due Diligence
- Enhanced Customer Due Diligence
- Documentation
- Transaction Monitoring
- Wallet Identification
- CySEC Onsite Inspections - Circular C550
- Common deficiencies
- Good practices
The “An AML Guide in 2024: Assessing Risks, KYC, CDD, Duties & Responsibilities” course offers materials in both PDF slides and online video recordings, allowing for flexible, self-paced learning. Enrolled learners can study anytime and anywhere at their convenience.
After completing the course, participants can assess their understanding of the material through a set of knowledge-based questions.
Additionally, this course contributes to the annual Continuous Professional Development (CPD) requirements for professionals, including those with CySEC Advanced and Basic certifications.
