The Elements of an AML/CFT Program

Question 1

What Basic elements that must be addressed in an AML/ CFT program

Answer 1

A system of internal policies, procedures and controls (first line of defense)
• A designated compliance function with a compliance officer (second line of defense)
• An ongoing employee training program
• An independent audit function to test the overall effectiveness of the AML program (third line
of defense)

Question 2

What is critical means of

mitigating AML/CFT risk per FATF

Answer 2

Customer due diligence (CDD)

Question 3

What is the Fifth Pillar established by FINCEN

Answer 3

Risk-based procedures for conducting ongoing CDD

Question 4

Elaborate the five Pillar established by FINCEN

Answer 4

1) A system of internal controls to ensure ongoing compliance;
2) Independent testing of BSA/AML compliance;
3) The designation of an individual responsible for day-to-day compliance;
4) Training for appropriate personnel
5) Risk-based procedures for conducting ongoing customer due diligence, to include, but not be limited to:
i) Understanding the nature and purpose of customer relationships for the purpose of developing a customerrisk profile; and
ii) Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.