What is an MLRO?

MLRO stands for Money Laundering Reporting Officer.

Section 26 of the Proceeds of Crime Act 2015 (“POCA”) imposes a requirement on every relevant financial business under legislation to maintain policies and procedures to prevent money laundering, the responsibility for creating the framework is with the Senior Management of the firm and they will appoint a MLRO.

The MLRO is the Compliance professional responsible for the oversight of the firm’s anti-money laundering activities and is the key person in the implementation of the anti-money laundering strategy of the firm.

The MLRO needs to be senior, to be free to act on their own authority and be informed of any relevant knowledge or suspicion in the firm. 

What is a relevant financial business?

A relevant financial business is any business described in Section 9 of the Proceeds of Crime Act 2015 (Page 54), which was updated on 23rd July, to include external accountants, Tax Advisors & VASPs.

GFSC’s guidance notes

The AML/CFT Guidance Note v8.0 , issued by the GFSC on the systems of control to prevent the financial system from being used for money laundering, terrorist financing or proliferation financing activities, was drafted in line with the requirements of the Proceeds of Crime Act 2015.
Chapter 5 specifically talks all about Senior Management’s responsibilities and the role of the MLRO, making references specifically to

1. Accountability
2. Appointment of the MLRO
3. Roles of the MLRO
4. Responsibilities of the MLRO .

Increasing demand for an MLRO

Over the past year, the above changes have resulted in a significant demand towards the need for high quality MLRO’s, particularly in the areas of DLT, VASPS & other Fin-tech entities.
This means having the knowledge and experience in both the traditional industry but also with the latest technological advances, thereby allowing the MLRO’s to adequately fulfil their responsibilities.

Questions to ask yourself

• Are you a relevant financial business and do you seek a high quality MLRO, that doesn’t just fulfil the MLRO requirements but also adds value to the firm?
• Are your systems of control adequately reviewed in line with the latest changes to POCA, MONEYVAL and the National Risk Register?
• Do you have in place a business risk assessment process?
• When was the last time you conducted an AML audit, if any?

Closing remarks

The team at TAG Consultancy provide the full service AML offering, from drafting of policies and procedures regarding AML, CFT & PF, to procuring of MLRO’s, conducting the necessary AML audits and ensuring that the latest changes to legislation are always incorporated in the policies and procedures of the firm.
If you require assistance on any of the areas described above, please contact us here.