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Top Qualities that Make a Good AML Compliance Officer

Financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) in the UAE are required to appoint a compliance officer to combat the crime of money laundering and financing of terrorism. Article 20 of Cabinet Decision No 10 of 2019 on Anti-Money Laundering & Combating the Financing of Terrorism (AML / CFT) specifically mentions that the appointment of an AML compliance officer is mandatory for financial institutions and DNFBPs. Failing to appoint an AML Compliance Officer in UAE will attract a penalty of AED 50,000.

Even though the AML laws across the world specify the core responsibility of a compliance officer, the requirements regarding his qualifications are vague. Generally, people with different types of backgrounds, including IT project managers and lawyers, can be hired to take the post of AML Compliance Officer. An AML Compliance Officer’s core responsibility is to ensure that the company’s AML policy corresponds to the international system. An AML Compliance Officer must be skilled in all types of financial policy and methodology of financial crime. And further Article 21 of Cabinet Decision No 10 of 2019 on Anti-Money Laundering & Combating the Financing of Terrorism (AML / CFT) specifies the Compliance Officer responsibilities which are broadly classified as under.

Chief Responsibilities of an AML Compliance Officer

An AML Compliance Officer oversees the financial regulations and personal data compliance requirements in a company. His responsibilities include screening and monitoring, payment fraud prevention, transaction monitoring for fiat and cryptocurrency etc. The other responsibilities include examining the records of high-risk clients and reporting suspicious activities, assisting in implementing the Anti-Money Laundering program of an organization and arranging inspections from third-party organizations.

The senior management of the company should be aware of the candidate’s required skills before hiring. The following are some of the key skills and qualifications of a potential AML Compliance Officer:

Integrity

Integrity is listed as the top quality that defines a good AML Compliance Officer. Only a person with strong moral principles and honesty can help the organisation efficiently implement the AML policy and achieve its objectives. Integrity is also about having the courage of your convictions, the confidence to speak out and the determination to see things through. The role of a compliance officer is a daunting job as they are fighting financial crimes. Therefore, they should know what’s the right thing to do and how to stick with it. In effect, the compliance officers should show the courage to fulfil the moral, professional and ethical requirements the role demands.

Industry Knowledge

An AML compliance officer should be an expert in his industry with relevant experience. The money laundering risks may vary from industry to industry. For instance, the risks in the banking industry will be different from those in the insurance sector. Similarly, in the case of the DNFBPs, the risk will be different in sectors such as real estate, gold trading, corporate & trust service providers, and auditors.

The Compliance Officer should have great knowledge about the industry developments and relevant regulatory requirements. The officer should also stay up to date with the latest tactics and trends in financial crime and money laundering. Money-launderers move fast and may adopt new tactics to perpetrate their crimes. A compliance officer should keep abreast of such trends to safeguard his company from such risks.

Risk assessment

The ability to accurately assess risk is a vital component of AML compliance as the role is all about identifying and evaluating risks of money laundering. The officer should consider all the factors that contribute towards risk scoring, and understands the implications of those risk scores for decision-making. This skill is not just to understand the risks being assessed, but how to balance commercial & regulatory risks and also personal vs business risks.

Interpret data

There are no black and white rules when it comes to combating money laundering in the UAE. An officer has to deal with the grey areas as well. The officer’s ability to create sense and policy out of these grey areas would contribute to enhancing the due diligence processes in the company. Logical and analytical skills and critical thinking are essential along with common sense and scepticism. Like, the routine audit/verification mindset is not sufficient, the compliance officer needs to see/verify the transactions beyond the normal/routine mindset and should have a clear understanding and knowledge of the various red flags involved in the industry.

Conflict management

A good AML compliance officer should excel in the soft skill of conflict management, especially to handle discord. The compliance officer should be smart enough to say no to the management for any high-risk client even by which the business revenue could also suffer. There will be situations when they have to explain and defend their point of view. They should also possess confidence and resilience in navigating tough situations and dealing with external bodies such as a regulator. Apart from having the skill to confidently assert them and carry out the job professionally, the compliance officers should also be approachable, collaborative, and demonstrate good emotional intelligence with peers and colleagues.

Reporting Method / Documentation

A good AML compliance officer needs to be a good auditor. As every auditor keeps the complete audit trail of every transaction where they have any negative opinion on the client’s financial statements. Likewise, a good AML compliance officer should keep all the documents with him/her for any suspicious transaction reported or not reported for future use or explanation to the regulatory authorities.

What else is important?

Apart from considering the candidate’s skills and abilities, a company should also give importance to factors such as how appropriate the candidate is for the unique policy of a company. These could be:

Expertise in applying math skills

The ability to analyse or interpret documents such as government regulations, internal controls, and instruction manuals

Ability to maintain discretion while handling confidential information

The willingness to work irregular hours and extended shifts such as late nights, early mornings, weekends, and holidays

Are you ready to Hire an AML Compliance Officer?

AML Compliance Officer is completely responsible for a company’s regulatory processes and reports which make him the most important cog in the wheel. The failure to appoint an AML Compliance Officer will attract hefty penalties in the UAE. There is no special qualification for choosing the right candidate for the role of an AML Officer. This is where the qualities and skills mentioned here will come in handy for the companies. The companies can hire a candidate based on these skills and impart AML training with the help of AML consultants in the UAE such as Jitendra Chartered Accountants (JCA). Being one of the DNFBPs, we understand the complexities involved and the level of concentration required not only from employees but from the management also.

JCA can provide services such as developing a compliance policy and procedures, reviewing current AML policy, implementing AML/ KYC/ CFT Plan and framework, AML audit and reporting, helping with due diligence frameworks and providing AML training to the employees. Hire JCA’s AML compliance services in Dubai to fight money laundering with the best regulatory practices.

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