Anti Money Laundering And Counter Terrorist Financing & Assessment Guidelines

Anti Money Laundering and Counter Terrorist Financing — Laws, Guidelines and Frameworks

© 2015Australian Financial Markets Association (AFMA)
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1. Develop knowledge of products and services
[Word limit: 600 words]

a) Assume that you are the AML/CTF manager for a reporting entity that provides at least five different financial products and services. Select five products and/or services and assume that they are provided by that organisation. Map each product and/or service to the designated services schedule set out in Section 6 of the Anti Money Laundering and Counter Terrorism Financing Act 2006, noting the relevant item numbers.

b) Why do you think that the products and services are listed in the schedule? Provide reasons for your answer.

c) When an organisation is deemed to be providing a designated service under Section 6, they are bound by the obligations contained in the AML/CTF Act. What are the obligations under the AML/CTF Act for an organisation offering the types of products and services you selected for part (a) of this question?

2. Comply with legislation
[Word limit: 600 words]

Assume that you are the AML compliance officer in a financial services organisation. The Board is reviewing the AML/CTF functions in the organisation and has asked you to prepare the following documents.
a) An overview of the relevant laws, regulations, and industry guidelines relevant to AML/CTF practice in Australia. Note that your list should include some overseas items. Present your information, identifying and summarising each of the requirements, in table format.

b) An outline describing how you, as the AML/CTF compliance officer:
(i) identify regulatory changes that affect the AML/CTF Program
(ii) incorporate these changes into the program on an ongoing basis, taking into account senior management and board oversight responsibilities.
c) An opinion on whether codes of ethics and conduct have any utility for an organisation in constructing AML/CTF strategies. Using the AFMA Code of Ethics and Code of Conduct justify your opinion. Note that the AFMA Code of Ethics and Code of Conduct can be found on the AFMA website at <>.


3. Plan and establish compliance management systems
[Word limit: 400 words]

Assume that you are the AML/CTF compliance officer for a reporting entity, and have been asked to prepare an outline of the approach you take to planning and assessing AML/CTF compliance in the organisation.

a) List six (6) AML/CTF obligations in the AML/CTF Act and/or AML/CTF Rules that apply to reporting entities.

b) Identify the controls required to manage each obligation and the owners associated with compliance of each obligation for your reporting entity.

c) Identify the resources needed to implement the controls.

d) Outline how you will assess the effectiveness of the controls, identifying the assessment methodologies and how frequently they would be assessed.

4. Assess risk
[Word limit: 600 words]
Assume that you are the AML/CTF compliance officer for a medium-sized reporting entity and have been asked to apply risk management principles to assess ML/TF risks for the organisation.

a) Describe in one or two sentences the nature of the business (e.g. a credit union, foreign exchange remitter or wealth management company). You will need to make some assumptions about the products and services provided by the entity – describe these briefly.

b) Identify the risk factors associated with the business. Your answer should demonstrate an understanding of what characteristics of your operations are attractive to money launderers and terrorist financers.

c) With reference to either the AUSTRAC Risk Management tool for small to medium sized businesses or ISO 31000:2009, for each of the risk factors that you identified in part

(b) of this question, consider the likelihood of ML/TF occurring and the impact of the act should it occur.

d) Outline the steps that you would undertake to complete the risk assessment of the entity.

e) Identify the stakeholders that you need to engage with in order to assess ML/TF risks for the organisation and for each, outline the issues on which you will seek their input and the information that you will provide to them at each stage of assessing the firm’s risk exposure.

5. Develop risk mitigation plan
[Word limit: 400 words]
Assume that you are responsible for evaluating the effectiveness of controls for ML/TF risks for a financial services organisation.

a) Provide two examples of effective tests of the controls for ML/TF risks. Justify your answer.

b) If controls fail, how would you know and what steps would you take? Provide reasons for your answer.

c) If there is a failure in controls, what information would you communicate to stakeholders and at what point? Identify the stakeholders. Justify your answer.


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