Compliance Office’s Key Role in Combating Terrorism Financing and AML Regulations
Importance of Compliance Officers in Sierra Leone
In Sierra Leone, the role of compliance officers has been emphasized as crucial in combating terrorism financing and Anti-Money Laundering (AML) regulations. Mobile money service providers are required to establish a robust risk management infrastructure and processes to mitigate the risk of money laundering, terrorism financing, and other unlawful activities.
Responsibilities of Compliance Officers
According to Section 3(5) of the Anti-Money Laundering and Combating of Financing of Terrorism Act 2012 (as amended), compliance officers must:
- Establish and maintain manual procedures in relation to their business
- Ensure that staff comply with AML regulations
- Report suspicious transactions to the Financial Intelligence Unit (FIU)
- Maintain adequate records
Liaison and Customer Identification Requirements
Compliance officers are expected to establish a liaison between reporting entities, supervisory authorities, and FIU in matters related to compliance with AML regulations. They must also:
- Implement customer identification requirements
- Record-keeping and retention procedures
- Conduct periodic reviews of risk ratings
Risk-Based Approach to Know Your Customer (KYC) Regime
The compliance office is responsible for ensuring that mobile money service providers adopt a risk-based approach to KYC regime when entering business relationships with customers. This includes:
- Determining the level of risk posed by each customer before deciding whether to commence a relationship
- Observing enhanced due diligence for higher-risk categories of customers, including:
- Non-resident customers
- Private banking clients
- Legal persons or arrangements
- Customers involved in money transmission and currency exchange
Importance of Reporting Suspicious Transactions
The FIU has emphasized the importance of reporting suspicious transactions within 48 hours of detection. Mobile money service providers that fail to comply with AML regulations may face severe penalties, including fines and imprisonment.
Conclusion
As Sierra Leone continues to implement measures to prevent illegal activities, compliance officers play a vital role in ensuring that mobile money service providers adhere to strict guidelines to prevent terrorism financing and money laundering.