Financial Crime World

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Central Bank Launches Enhanced AML/CFT Supervision Framework

The Central Bank has introduced a new risk-based supervision framework aimed at strengthening its monitoring and oversight of financial institutions’ anti-money laundering (AML) and combating the financing of terrorism (CFT) practices.

Overview

Under this framework, firms will be subject to varying levels of supervisory engagement based on their money laundering/terrorist financing (ML/TF) risk rating. High-risk firms will face more frequent and intense supervision, while lower-risk firms will receive less intensive monitoring.

Risk-Based Supervision Model

The framework sets out a minimum level of supervisory engagement for firms in different categories, based on their ML/TF risk rating. These categories include:

  • High ML/TF Risk: Firms subject to regular onsite inspections and annual AML/CFT review meetings.
  • Medium-High ML/TF Risk: Firms subject to strategic, spot-check, and responsive supervisory engagement.
  • Medium-Low ML/TF Risk: Firms subject to strategic, spot-check, and responsive supervisory engagement.
  • Low ML/TF Risk: Firms subject to annual AML/CFT review meetings and risk evaluation questionnaires.

Supervisory Powers

The Central Bank has been granted additional powers under the Central Bank (Supervision and Enforcement) Act 2013 to obtain compliance with AML/CFT obligations. These powers include:

  • Issuing notices requesting reports on specific matters.
  • Requesting information necessary for the Central Bank to perform its obligations as a Competent Authority.
  • Appointing authorized officers to enter premises, conduct searches, and request documentation.

Enforcement

Designated persons found in breach of their AML/CFT obligations will be required to undertake remediation action. Failure to comply may result in enforcement action under the Central Bank’s Administrative Sanctions Procedure (ASP).

The Central Bank has also published a number of recent settlement agreements related to breaches of the CJA 2010.

Risk Evaluation Questionnaire

As part of its supervisory programme, the Central Bank requires firms to complete an annual Risk Evaluation Questionnaire (REQ) to provide information on their exposure to ML/TF risks and AML/CFT compliance framework. Firms must submit the REQ in a specified format through the Central Bank’s Portal within a specified time period.

The Central Bank has published guidance materials, including FAQs and a sample REQ form, to assist firms with completing the questionnaire.

Media Contact

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