Lesson 4 of 9

Module 04: Responsibility of the Money Laundering

Reporting Of ce
Juno Education

What Is the Role of a Money Laundering Reporting Of ce?

The Financial Conduct Authority defines and outlines the role of the Money Laundering
Reporting O ce in the FCA Handbook. In addition to ensuring their firm's compliance with
anti-money laundering controls, MLROs are required to report any information, knowledge, or
suspicion of money laundering to law enforcement, in this case, the National Crime Agency
(NCA). Practically, MLROs are responsible for designing pertinent policies and procedures,
maintaining records, filing internal and external reports, and ensuring that customer due
diligence is performed. They must also participate in the firm's ongoing review of its internal
policies, procedures, and professional relationships to ensure that money laundering and other
financial crimes are detected and reported in accordance with UK law. In this capacity, MLROs
may be required to train colleagues within their organization.

The FCA emphasizes that a Money Laundering Reporting O cer should have su cient
authority to carry out their responsibilities e ectively. Importantly, MLROs will have to advise
senior management on how to manage their firm's exposure to money laundering risk. In
larger organizations, MLROs may be required to delegate a portion of their responsibilities or
appoint deputies to assist in managing their work.

MLRO relationship with the C-Suite

Since financial regulations may extend corporate criminal liability for AML o enses to
corporate persons, it is crucial that MLROs have access to the C-Suite. In practice, this means
that MLROs must be able to communicate vital AML/CFT information to board members and
understand when to escalate compliance incidents so that suspicious activity reports are filed
with the appropriate authorities. The relationship between an MLRO and the C-Suite may be
complex. Firms should carefully consider how to integrate a MLRO into their governance
infrastructure, taking into consideration any relevant personal liabilities or obligations.
Ultimately, an MLRO should be able to exert e ective influence over an executive board and
instill a strong culture of compliance across the entire organization.

The Money Laundering Reporting Of cer Authority

An MLRO should hold a position of su cient seniority within their organization so that they
have access to the necessary files and information to fulfill their anti-money laundering
responsibilities. Additionally, their position should permit them to design, implement, and
enforce the AML compliance program and systems for their company. Given the legal
ramifications of the position and the personal liability they assume, an MLRO should be a
director-level employee with the knowledge and experience to make confident decisions.
MLRO's Legal Privilege
Since they may be required to disclose sensitive information to the NCA – which could have
legal ramifications for their firm and its employees – an MLRO should have a solid
understanding of legal professional privilege. Determining what information must be divulged
and when it must be divulged is, therefore, central to the mandate. In light of this, an MLRO is
not required to have legal training, but knowledge of the field is advantageous. Alternatively, a
money laundering reporting o cer could have access to competent legal counsel regarding this
aspect of their responsibilities.

The regulations also require firms to implement the following measures to facilitate the
AML/CFT function of the compliance o cer:

Compliance o cers should be evaluated to ensure they are capable of performing

their duties. Assessment documents should be preserved.

Disclosure of compliance o cer conflicts of interest is required.

Firms must designate a reporting o cer to the relevant financial intelligence unit
(FIU).

Documentation of internal AML/CFT policies, controls, and procedures is required.

Businesses should implement a whistleblower service to protect employees and

executives who report regulatory violations.

Firms should conduct continuous monitoring of their AML/CFT programs to

ensure their e cacy in an ever-changing financial environment.

The AML/CFT program of a company should include an independent audit function.