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Part A of all AML/CTF Programs must include procedures to ensure an independent review is conducted at regular intervals. Arranging for an independent review of your AML/CTF Program to be conducted is imperative to ensuring compliance with the AML/CTF Rules.

What is an Independent Compliance Review?

The purpose of an independent review is to provide an impartial assessment of whether Part A of your AML/CTF Program has been implemented effectively, whether it addresses its ML/TF risks and complies with the legislative requirements. All of these requirements should be tested in the independent review.

Reporting entities are able to use their understanding of ML/TF risk to determine the specific actions and methodology required to complete the review and can determine the scope of the review required to be conducted, in consultation with the reviewer. Independent reviews also provide an opportunity to assess whether previous audit issues have been addressed.

What should be included in the Independent Compliance Review?

The review should assess and test:

  1. the effectiveness of your AML/CTF Program in addressing your ML/TF risks;
  2. if your AML/CTF Program meets the requirements of the AML/CTF laws;
  3. how effectively your AML/CTF Program has been implemented; and
  4. if you have been complying with your AML/CTF Program appropriately.

How often should you review your AML/CTF Program?

Any business with an AML/CTF Program must have it reviewed regularly. Sophie Grace recommends that your AML/CTF Program is reviewed at least annually, however it’s up to each reporting entity to determine how often its program is reviewed, whether this is done internally or externally and whether independently or not. Some things you should take into account when making your decision include:

  • the nature of your business (i.e. Remitter, Digital Currency Exchange Provider, Financial Planner etc);
  • the size and complexity of your business; and
  • the type of ML/TF risks your business faces.

Sophie Grace can conduct an independent review of your Program and report upon your compliance with the applicable statutory and regulatory obligations.

Further Information

For further information on ensuring your AML/CTF Program is compliant prior to a review, refer to our blog article titled ‘Is your AML/CTF Program Complaint?’

The AML/CTF Rules in relation to the independence of a reviewer were tightened recently. For further information on the independence of a review, refer to our blog article titled ‘AML/CTF Compliance Reviews: Is your reviewer independent?’

Sophie Grace can assist you to conduct a full external compliance review in relation to your AML/CTF obligations.

If you would like further information or any assistance with your AML/CTF obligations, please contact Sophie Grace directly.

Ivana Josic

Ivana is responsible for all Marketing activities for Sophie Grace and assists both the Compliance and Legal teams with a particular focus on Compliance services. Ivana focuses on website development, management and ensures clients receive the latest regulatory updates through Sophie Grace social media channels, the newsletter and website blog page. Ivana also assists the Compliance team with drafting and amending compliance documentation, preparing AFSL and ACL Applications and implementing ongoing compliance solutions.