As the Compliance Officer for hyperWALLET Systems Inc., I was looking forward to meeting fellow compliance officers and learning how they are coping with the latest FINTRAC regulation changes, which state:
“Effective June 23, 2008, all reporting entities under Canada’s anti-money laundering & counter-terrorism financing (AML/CTF) legislation must ensure that their “…compliance regime includes an assessment and documentation of risks related to money laundering and terrorist financing [and] … focus resources on where they are most needed to manage [those] risks” on an ongoing basis.”
Over the course of three days, 15 group sessions and 6 plenary sessions were held to discuss these updated regulations, including:
- Assessing the effectiveness of a Risk Management Program.
- Preventing fraud, a proactive guide to controlling its impact on your organization.
- Implementing a risk assessment program for at-risk customers.
- The impacts of Canada’s Market Enforcement Teams.
- Identifying geographic risks for customers living in Canada.
- Compliance with Bill C-25: what have the regulators found since June 2008?
- Case studies — more real life examples of what is emerging from the reports submitted by reporting entities
Dissecting risk to strengthen compliance
This year FINTRAC, OSFI and the RCMP stressed the importance of MSBs maintaining a rigorous risk management regime. To ensure active compliance and provide valuable data to assist with identifying potential money launderers, the regulatory authorities stressed multiple times the importance of MSBs having an effective AML (Anti-Money Laundering) policy, and submitting unusual activity reports to flag suspicious entities.
One of the most informative sessions was ‘Managing Risk: A Two Headed Coin’, which discussed the need for businesses to ensure an organized approach to managing risk and K.Y.C compliance requirements from an MSB’s perspective. The two key takeaways from this session were that a regulated business should:
- Work with external partners (including corporate partners and banks) to secure compliance information, monitor risks, and perform on-going assessment of all existing client relationships.
- Assign internal staff the specific tasks and responsibilities (ie, categorization, enhanced due diligence, application reviews) necessary to perform strict KYC on all potential clients, prior to establishing a business relationship.
Both of these points reinforce the fact that businesses should have internal processes that can identify potentially suspicious customer applications. Once in place, such processes enable potentially suspicious clients to be flagged at an early stage, helping organizations mitigate risk.
Conclusions
This conference provided insights into how MSBs can implement an organized approach to developing policies and procedures, to effectively manage risk as their client relationships grow. The overall consensus seemed to be that in an ever-changing technology and business environment, an organization’s implementation and modification of compliance procedures is certainly a challenging task, but one that is attainable through disciplined approach to risk management.
For hyperWALLET, it was a great opportunity to meet and learn from regulatory authorities, fellow compliance officers from various financial service industries, and build on established partner relationships with Canadian Credit Unions. We look forward to participating in future events that educate and bring together compliance-minded professionals and related topics.
