Consolidation of Comments/Responses on AML/ATF General Guidance Notes (2016-06-03)

Summary

This document is a consolidation of stakeholder comments received during the BMA's consultation on the revised AML/ATF General Guidance Notes for Regulated Financial Institutions (RFIs), together with the Authority's responses and resolutions. It is not itself a binding rule but records how BMA addressed industry feedback and which points led to changes in the Guidance Notes.

• Three-pronged SAR test: BMA agreed the Guidance Notes' reference to a three-pronged test (belief/knowledge, suspicion, reasonable grounds) for filing Suspicious Activity Reports is inconsistent with POCA's two-pronged test and will be removed from the GN pending possible legislative amendment.
• Consent regime: BMA agreed to add text to the GN reflecting the strict timelines for FIA consent under POCA sections 43-45 and to align references with ATFA section 12.
• Compliance Officer seniority: BMA agreed to amend the GN so the Compliance Officer can be appointed at managerial level (rather than only senior executive/director level), reporting to senior management.
• Independent audit and qualifications: BMA clarified it will not define 'qualified' beyond fit-and-proper standards; RFIs must screen staff/third parties performing audit or reporting officer roles for competence.
• Correspondent banking wording and other drafting fixes: BMA agreed to various wording amendments (e.g. 'provision of correspondent banking', 'compliance and/or internal auditing departments').
• Risk assessment methodology: BMA indicated risk assessment (inherent/residual risk) should be applied at the customer level, not portfolio level, and will engage further with stakeholders on this.
• Outstanding/unresolved items: Several matters (e.g. tax evasion suspicions, treatment of overseas operations, sectoral guidance for insurance) were noted as outside current scope or deferred to future consultation or NAMLC referral.

Because this is a consultation response document rather than the Guidance Notes themselves, it does not create new standalone compliance duties; instead it signals amendments BMA committed to making to the AML/ATF General Guidance Notes, which RFIs should watch for and apply once updated.

Key obligations

• RFIs must ensure staff and third parties appointed to compliance, reporting officer, or independent audit roles are screened for competence and are fit and proper for the role
• RFIs must structure their AML/ATF programme using a risk-based approach and apply risk assessment methodology at the customer level as clarified by BMA
• RFIs must conduct an independent AML/ATF audit at least once per year, separate from general operational audit, though it may be staggered into smaller reviews across the year provided all required areas are covered within the year
• Senior management must be advised of compliance/exception reports at least once per year as part of the periodic reporting requirement

Applies to

AML/ATF Regulated Financial Institutions (RFIs), banks, insurers, compliance officers and reporting officers of regulated financial institutions