External Audits for Anti-Money Laundering and Counter-Terrorism Financing

New Requirement for External Audits

Based on recent developments, supervisory authorities can now require external audits to verify compliance with policies and controls established by reporting entities to manage risks associated with money laundering and terrorism financing.

Key Aspects of External Audits

• Verification of Compliance: External audits will be used to ensure that reporting entities comply with the policies and controls in place to mitigate money laundering and terrorism financing risks.
• Established Policies, Controls, and Procedures: Reporting entities must establish and maintain effective policies, internal controls, and procedures (Article 13) to manage these risks.

Lack of Specific Requirements

While external audits are being introduced as a means of verifying compliance with anti-money laundering and counter-terrorism financing regulations, there is currently:

• No Mention of Scope: There are no specific requirements or guidelines provided regarding the scope of external audits.
• No Frequency Standardized: The frequency of external audits is not specified in the text.
• No Standards or Guidelines Provided: There are no clear standards or guidelines outlined for conducting these audits.

Conclusion

The introduction of external audits aims to enhance compliance with anti-money laundering and counter-terrorism financing regulations. However, more information is needed to understand the specifics of these audits, including who will conduct them, how often they will occur, and what specific standards or guidelines will apply.