Is your AML/CTF program effectively managing risk?

By Amy Daley

21 October 2020

The Australian Federal Police have made further arrests this month into child sexual exploitation as a result of information reported to AUSTRAC.

Back in November 2019, the highly successful private-public sector partnership ‘Fintel Alliance’ published learnings from two years’ worth of global law enforcement investigations into the sexual exploitation of children.

The paper provides indicators that can be used to identify behaviours that may indicate actual or suspected criminal activity associated with this heinous crime.

Whilst we have seen increased attention and emphasis placed on effective financial crime management over the last few years, it is important that Boards and Senior Management ensure their organisations have adequate controls in place to actively monitor, assess and respond to this type of expertly informed, publicly available, highly valuable intelligence.

With almost 12 months passed since the Child Sex Exploitation indicators were released, organisations should now be in a position to produce evidence that they have used this information to enhance their Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) controls, inclusive of changes to:

  • Customer risk profiling;
  • Transaction monitoring;
  • Regulatory reporting;
  • Training and refresher programs; and
  • Financial crime investigations, reporting and analysis.

In order to demonstrate effective risk management, and a genuine desire to prevent, as opposed to potentially facilitate irreversible harm to the most vulnerable members of our community, organisations must ensure their AML/CTF program, is:

  • Established, understood, and consistently implemented across the organisation;
  • Operating as intended, with deficiencies known and being actively addressed with adequate Board and Senior Management oversight;
  • Dynamic, with evidence of periodic and as needed updates to reflect and keep stakeholders well-informed of regulatory change and industry insight; and
  • Managed by capable and sufficiently qualified and resourced personnel.

As further intelligence is released from the Fintel Alliance and other credible sources, organisations must ensure they maintain evidence of receipt, assessment, and appropriate action.

For AML/CTF advice and support, please reach out to the capable team at PKF today. We will discuss your needs and deliver a tailor made, independent and effective review or advisory service that will provide your organisation with an accurate view of the current state, along with value add enhancement suggestions to help drive continued framework maturity.