TRINIDAD AND TOBAGO: Financial Institutions Mandated to Conduct Annual AML/CFT Compliance Audits
In a bid to strengthen anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, financial institutions and listed businesses in Trinidad and Tobago are now required by law to conduct an independent review of their AML/CFT policies and procedures on an annual basis.
Background
The Financial Intelligence Unit (FIU) has issued guidelines requiring financial institutions and listed businesses to conduct an independent review of their AML/CFT policies and procedures. The review aims to ensure that these entities comply with the relevant laws and guidelines issued by the FIU.
Conducting the Review
The independent review can be conducted either internally or externally by a professional auditor or competent individual. However, if an internal audit is not feasible, the FIU will accept an external audit report.
Submission Requirements
- The review must be submitted to the entity’s Board of Directors and the relevant Supervisory Authority.
- Recommendations for improvement should also be included in the submission.
Auditor Qualifications
To conduct the review, financial institutions and listed businesses are required to source an external auditor or competent professional who has the necessary qualifications and experience in AML/CFT laws and regulations.
Scope and Methodology
The scope and methodology of the audit will depend on the nature of business activities, types of transactions accepted, volume of transactions, and history of AML/CFT compliance. The audit should test compliance in several key areas, including:
- Compliance programs
- Compliance officer functions
- Internal controls
- Reporting obligations
- Training and record-keeping obligations
Due Diligence
Financial institutions and listed businesses are advised to conduct a level of due diligence when sourcing an external auditor or competent professional. This includes verifying the candidate’s qualifications, experience, and certification in law, accountancy, business, management, or other relevant fields.
Benefits
The move is aimed at enhancing Trinidad and Tobago’s efforts to combat money laundering and terrorist financing, and to bring its anti-money laundering regime in line with international standards.