Financial Crime World

TIGHT TIMEFRAMES LEAD TO COMPLIANCE CONCERNS

Retirement Scheme Administrators Face Pressure to Comply with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regulations

Retirement scheme administrators are under tight timeframes to comply with AML/CFT regulations, but a recent review reveals that many are struggling to keep up. The review highlights concerns about compliance, risk management, and training among retirement scheme administrators.

Compliance Concerns

  • Assessing Individual Entities: Nearly 75% of administrators have not assessed the AML/CFT framework of individual entities on whom they rely.
  • Enhanced Due Diligence: Over 50% do not require enhanced due diligence in higher-risk situations or when dealing with politically exposed persons (PEPs).
  • Internal Auditing and Testing: Many administrators fail to perform regular reviews or conduct independent audits. Nearly 40% have not performed an audit in the past year.

Reporting Suspicious Transactions

  • Suspicious Transaction Reports (STRs): Over 20% of administrators did not submit any STRs to the Financial Intelligence Analysis Unit (FIAU).
  • Documentation: Many administrators failed to document the reasons for non-submission of STRs.

Training and Awareness

  • AML/CFT Training: Nearly 30% of administrators do not provide regular training on AML/CFT regulations.
  • Staff Knowledge Gap: Many staff members are not receiving AML/CFT training in the past year, leaving a knowledge gap that can put retirement schemes at risk.

Call to Action

Retirement scheme administrators must take immediate action to address these compliance concerns. This includes:

  • Conducting thorough assessments of their AML/CFT frameworks
  • Implementing robust risk management procedures
  • Providing regular training to staff members
  • Reviewing and updating compliance programs to ensure they meet the required standards

The Malta Financial Services Authority (MFSA) is urging all administrators to take necessary steps to ensure they are meeting the required standards. Retirement scheme administrators must prioritize compliance, risk management, and training to protect their schemes from AML/CFT threats.

Key Findings

  • 75% of administrators have not assessed the AML/CFT framework of individual entities
  • Over 50% do not require enhanced due diligence in higher-risk situations or when dealing with PEPs
  • Nearly 40% have not performed an audit in the past year
  • Over 20% did not submit any STRs to the FIAU
  • Many administrators failed to document reasons for non-submission of STRs
  • Nearly 30% do not provide regular training on AML/CFT regulations