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By Mark Dorosz
VP of Compliance Learning, Interactive Services
The quality and effectiveness of an anti-money laundering compliance program depends on commitment, continuous training and executive oversight. The best time for employees to identify suspicious activities is before transactions are completed, so these industry best practices will ensure transparency and high quality protection.
More and more companies are hiring chief compliance officers (CCOs) to help oversee their financial operations. The SEC states that CCOs play a critical role in maintaining financial integrity. They generally have three primary duties. First, policy management through defining, training and communicating corporate procedures. Second, compliance monitoring through measuring organizational adherence to standards. Third, investigation management through thoroughly examining and responding to violations. They usually collaborate with risk, legal and financial departments to resolve issues and maintain programs.
Some anti-money laundering compliance programs are process-driven, so they may become bogged down by ineffective training, unnecessary rules and slow bureaucracy. The SEC states that there are five failures that automatically increase the likelihood of financial impropriety, so professionals training programs focus on the most critical issues. First, failure to report conflicts of interest. Second, failure to design policies for outside business activities. Third, failure to conduct annual audits. Fourth, ignoring investment advisors who overlook compliance issues. Fifth, failure to implement policies that prevent account misappropriations.
Record Keeping Best Practices
An anti-money laundering compliance program is only as good as the accuracy and availability of documentation. Employee files are an excellent place to include signed and dated training documentation. Many financial organizations require employees to re-sign these policies during annual performance reviews. If an employee ever conducts illegal transactions, these signed files will support disciplinary actions and law enforcement investigations. Consider creating a notebook of compliance training and professional development sign-in sheets with the content outlines. This is an excellent defense against critical auditors and unexpected inspections.
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