Compliance visit tests: Checking compliance under the Risk Based Approach: MSBs
For most small and medium MSBs, the basic requirements for effective AML controls are compliance with the minimum legal requirements for customer due diligence and transaction monitoring (and for money transmitters, Complete Information on the Payer under the EC Payments Regulation), together with the ability to recognise higher-risk situations and respond with additional measures to mitigate the increased risk and identify and report suspicious activity to SOCA .
During compliance checks on MSBs officers should check that they have included how to deal with directions issued under the Counter Terrorism Act 2008 and other financial sanctions in their anti money laundering systems and processes and that these processes are operating in accordance with the policy.
Officers should also ensure that MSBs comply with the specific requirements of any directions issued under this Act. Risk teams should identify whether there are any existing directions in place and provide officers with all the details. Officers should check that where appropriate the following are tested:
- Transactions and customer files reviewed to check if appropriate measures for customer due diligence, ongoing monitoring, systematic reporting and limiting or ceasing business have been followed in line with the requirements specified in any direction.