Standard Guidelines Anti-Money Laundering and Counter Financing ...

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STANDARD GUIDELINES ON AML/CFTUPW/GP110. AML/CFT COMPLIANCE PROGRAMME10.1. Policies, Procedures and Controls10.1.1. The reporting institution’s Board of Directors 4 and SeniorManagement should be aware of the money laundering andfinancing of terrorism risks associated with all its businessproducts and services and understand the AML/CFT measuresrequired by law, regulations, guidelines and the industry’sstandards and best practices as well as the importance ofimplementing AML/CFT measures to prevent it from being abusedby money launderers and financiers of terrorism. It is the duty ofthe Board of Directors to maintain adequate oversight of theoverall AML/CFT measures undertaken by the reporting institutionand the duty of the Senior Management to ensure that the Boardof Directors is updated with timely information.10.1.2. The Board of Directors should be fully committed in establishingan effective internal control system for AML/CFT. It is theresponsibility of the Senior Management to ensure such internalcontrols are in place and implemented effectively, including themechanism to monitor and detect complex and unusualtransactions.10.1.3. The Board of Directors should ensure that the reporting institutionhas, at the minimum, policies on AML/CFT procedures andcontrols. For this purpose, the Senior Management will assist theBoard of Directors in formulating the policies and ensure that thepolicies are in line with the risks associated, nature of business,complexity and the volume of the transactions undertaken by thereporting institution.10.1.4. The Board of Directors should set minimum standards andapprove the policies regarding AML/CFT measures within thereporting institution, including those required for customeracceptance policy, customer due diligence, record-keeping, ongoingmonitoring, reporting of suspicious transactions andcombating the financing of terrorism. The Senior Management inrelation to this must ensure that such procedures are formulatedand effectively implemented. For this purpose, the Board ofDirectors should assess the implementation of the approvedAML/CFT policies through regular updates by the SeniorManagement and audits.10.1.5. To ensure effective implementation, the Board of Directors shoulddefine the lines of authority and responsibilities for implementingthe AML/CFT measures and ensuring that there is a separation ofduty between those implementing the policies and procedures and4Board of Directors also includes references to Partners and Sole-proprietors.15
STANDARD GUIDELINES ON AML/CFTUPW/GP1those enforcing the controls. In line with this, the Board ofDirectors should ensure the:compliance officer at Head Office and at each branch orsubsidiary is appointed; andeffectiveness of internal audit in assessing and evaluatingthe controls to prevent money laundering and the financing ofterrorism.10.1.6. The Board of Directors should review and assess the AML/CFTpolicies and procedures in line with changes and developments inthe reporting institution’s products and services, technology aswell as trends in money laundering and the financing of terrorism.The Senior Management is responsible to implement thenecessary changes to the AML/CFT policies and procedures withthe approval of the Board of Directors in ensuring that the currentpolicies are sound and appropriate.10.1.7. The Board of Directors and the Senior Management should ensurethat there is adequate AML/CFT training provided for itsemployees, including promoting employees’ awareness of theirAML/CFT obligations.10.2. Staff Integrity10.2.1. The Senior Management must ensure the integrity of the reportinginstitution’s employees at all times by establishing an appropriateemployee assessment system (commensurate with the size ofoperations and risk exposure of the reporting institution to moneylaundering and financing of terrorism), that is approved by theBoard of Directors to adequately screen its employees.10.2.2. The employee assessment system should include evaluation of anemployee’s personal information, including criminal records,employment and financial history as part of the recruitmentprocess.10.3. Compliance Officer10.3.1. The Senior Management is responsible to appoint the complianceofficer at Senior Management level who is “fit and proper” to carryout his AML/CFT responsibilities and can effectively discharge it.In general, the compliance officer acts as the reference point forthe AML/CFT matters, including employees training and reportingof suspicious transactions.10.3.2. The reporting institution should inform, in writing, the FinancialIntelligence Unit in Bank Negara Malaysia on the appointment orchange in the appointment of the compliance officer, includingsuch details as his name, designation, office address, office16
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