MONEYVAL, the assessment body established by the Financial Action Task Force (FATF), plays a critical role in evaluating countries’ adherence to international anti-money laundering and counter-terrorism financing standards. For businesses, preparing for a MONEYVAL assessment requires a comprehensive understanding of the assessment criteria and a diligent approach to compliance. In this article, we will explore key areas of concentration and steps that businesses can take to effectively prepare for MONEYVAL assessment.
Understanding the Assessment Criteria
MONEYVAL’s assessment is based on the 40 Recommendations provided by the FATF, which outline technical requirements and policies related to anti-money laundering and counter-terrorism financing. Additionally, there are eight “immediate outcomes” that assess the effectiveness of implementing these requirements in practice. Businesses must focus on both technical compliance and effective implementation to ensure a favorable assessment outcome.
Areas of Concentration
1. Familiarise Yourself with the Island Framework:
Stay updated on National Risk Assessments (NRAs), industry updates, and relevant feedback from key regulatory bodies such as the Commission or Government. Understand the specific risk factors identified in NRAs and assess how they apply to your business operations. Map these key themes from NRAs to your business areas and link them to your business risk assessment. Develop a compliance monitoring plan aligned with your risk assessment findings.
2. Align Your Business Framework with MONEYVAL Requirements:
Examine the preventive measures outlined in FATF Recommendations 10-23. Focus on Immediate Outcome 4, which emphasizes the adequate application of anti-money laundering and counter-terrorism financing measures, along with the reporting of suspicious transactions. Pay particular attention to the following aspects:
– Customer Due Diligence (CDD) measures
– Record-keeping practices
– Politically Exposed Persons (PEP) measures and review of PEP register
– Third-party reliance
– High-risk jurisdictions
– Suspicious Activity Report (SAR) reporting
– Tipping off prevention
– Identification of beneficial owners
– AML/CFT/CPF Training
3. Specific Considerations for Deposit Takers:
For businesses operating as deposit takers, additional focus should be placed on:
– Customer onboarding and risk assessments
– Wire transfers
– Correspondent banking relationships
– Internal controls pertaining to foreign branches and subsidiaries
4. Anticipating Scrutiny for Virtual Asset Providers and Money Transfer Businesses:
Given the evolving landscape, virtual asset providers and money transfer businesses can expect increased scrutiny during the MONEYVAL assessment. These sectors should be prepared to demonstrate robust compliance measures in line with the Recommendations and immediate outcomes.
5. NPOs
For non-profit organisations, the focus is likely to be on record keeping around significant donors.
Preparing for a MONEYVAL assessment requires businesses to be proactive and diligent in aligning their operations with international anti-money laundering and counter-terrorism financing standards. By focusing on the areas of concentration outlined in this article, businesses can enhance their compliance framework, mitigate risks, and ensure they meet the expectations set forth by MONEYVAL. For regulated entities in Jersey, some of these areas are also subject to themed examinations in the coming year, giving an added incentive to look closely at them. It is crucial for organisations to stay informed about regulatory updates, actively assess their risk exposure, and implement effective preventive measures to safeguard their reputation and maintain a competitive edge in the global marketplace.
