AML Controls Assurance Independent Review - Waystone

      AML Controls Assurance Independent Review

      The AML Controls Assurance Independent Review (“AML Review”) is mandated by the requirements of Regulation 5 of the Anti-Money Laundering Regulations (2020 Revision) as amended, and as read with Part II, 10.B of the Guidance Notes (June 2020).

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      Cayman fund vehicles and management companies should, on a regular basis, conduct an AML Review. The frequency of the AML Review must be commensurate with the entity’s nature, size, complexity, and risks identified during the risk assessment process. The AML Review is an independent review of the entity’s AML policy and procedures and the person(s) conducting the AML Review must not have been involved in any of the matters which are being tested/audited.

      While the AML Review does not need to be filed with the Cayman Islands Monetary Authority (CIMA), it is something that CIMA may expect to see evidence of, or reasons why an AML Review has not been completed, as part of their supervisory inspection process.


      Anti-Money Laundering Regulations (2020 Revision)

      • A person carrying out relevant financial business shall not, in the course of the relevant financial business carried out by the person in or from the Islands, form a business relationship, or carry out a one-off transaction, with or for another person unless that person
        • maintains as appropriate, having regard to the money laundering and terrorist financing risks and the size of that business, the following procedures in relation to that business
          • such other procedures of internal control, including an appropriate effective risk-based independent audit function and communication as may be appropriate for the ongoing monitoring of business relationships or one-off transactions for the purpose of forestalling and preventing money laundering, terrorist financing and proliferation financing.


      Guidance Notes (June 2020)

      SECTION 10 – Other Internal Controls (Relating to Audit Function, Outsourcing, Employee Screening And Training)

      • Audit Function
        • An FSP should, on a regular basis, conduct an AML/CFT audit. The frequency of the audit must be commensurate with the FSP’s nature, size, complexity, and risks identified during the risk assessments. The AML/CFT audits should be conducted to assess the AML/CFT systems which include:
          • test the overall integrity and effectiveness of the AML/CFT systems and controls;
          • assess the adequacy of internal policies and procedures including;
            • CDD measures;
            • Record keeping and retention;
            • Third party relationships (e.g. EIs) and supporting documentation; and
            • Transaction monitoring;
          • assess compliance with the relevant laws and regulations;
          • test transactions in all areas of the FSP, with emphasis on high–risk areas, products and services;
          • assess employees’ knowledge of the laws, regulations, rules, guidance, and policies and procedures;
          • assess the adequacy, accuracy and completeness of training programmes; and
          • assess the adequacy of the FSP’s process of identifying suspicious activity including screening lists.


      How can Waystone Help?

      Waystone can provide independent AML Compliance specialists to perform the AML Review. Our AML Compliance specialists will perform in-depth compliance reviews of Cayman fund vehicles and management companies, along with recommendations to help with preparation for potential regulatory inspections.

      Contact Waystone today to learn more about our Cayman AML Controls Assurance Independent Reviews.

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