AML Regulatory Reporting Service

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Comprehensive Solutions for Anti money Laundering Compliance Reporting

Enterslice, as a consultancy firm, helps you meet all the AML regulatory reporting services and their compliances. No matter whether you have to meet the strict deadline of the regulatory authorities or to track suspicious activities, etc, we are here to help you with our best professionals in the house. Anti-money laundering is a program to deal with illicit activities by the customer, such as market manipulations, terrorist financing, etc. It is the procedure adopted by companies or financial institutions to detect or identify financial crimes and other illegal activities.

AML Regulatory Reporting service is one of the key elements of the anti-money laundering compliance and regulations to be exercised by the companies to mitigate financial crimes. However, with the adverse impact of technological advancement, ensuring AML compliance and regulations is a critical aspect of financial operations. We have a professional AML regulatory reporting service for companies to deal with reports on illegal activities related to money laundering.

The financial organization, as per the AML compliance and regulations, needs to maintain certain reports to identify and detect suspicious activities. Also, this anti-money laundering reporting solutions repo by the company has to fulfil the legal obligations in fighting against the activities linked to money laundering and other financial activities.

Types of Anti money laundering Reporting Solutions

It is important for financial institutions to conduct various anti-money laundering programs to prevent money laundering activities or counter-terrorist financing. According to the Prevention of Money Laundering Act, AML regulatory reporting needs to be maintained by the financial organization, which must make reports on any suspicious activity or transactions to the director of FIU-IND(Financial Institution of India). Types of AML Regulatory Reporting are

Currency transaction report

Whenever a customer in a bank makes a large volume of transactions, the bank shall maintain a form to be filled out by the employee as a report to help prevent money laundering. This report has an enforcement of law that monitors and prevents money laundering and other illicit activities. All the AML regulatory reporting shall be based on electronic mediums such as the BSA E- E-filling system.

Suspicious Activity Reports

A financial institution needs to maintain a report or a necessary paper when they detect or identify any suspicious transactions that take place connected to money laundering or fraud. These are the kinds of reports that help financial institutions fight illegal activities related to money laundering. With this suspicious activity report, the government can spot and analyze the broader aspect of financial crimes and spectrums of organized crimes; this helps the government fight against the anticipated criminal activities or behaviour before it gains a foothold.

Know your customer reports

KYC reports are the compliances under the anti-money laundering programs, prior to onboarding of customers/ wallets as well as conducting the re-KYC for the existing customers. The purpose of the KYC report is to gain the complete details of the new customer as well as the existing customer (in case the details are not available) by the financial institutions. However, this report helps the company to track the suspicious activity or behaviour of the customer.

Transaction Monitoring Reports

Transaction Monitoring is a tool carried out by the financial sector to track the customer's behaviour with the financial transaction; it monitors and analyses the client's transactions and thus alerts them with red flags if any illicit activities related to money laundering are detected. Transaction monitoring is a crucial tool for financial organizations to combat money laundering activities.

Due Diligence Reports

The service provider of the AML regulatory reporting shall also maintain up-to-date customer due diligence, identifying the relevant customer information and its beneficial owners. It is a report to be maintained by the management of the company to identify the risk level with the customer by monitoring the relationship with the organization. However, the primary motive of customer due diligence was to gain trust and prevent the customers' money laundering activities.

Politically Exposed Persons

Politically exposed persons are the ones who are more susceptible to corruption, bribery, etc. These are the customers considered at high risk, and thus, concerned financial institutions are required to conduct customer due diligence along with enhanced due diligence. They are politically influenced people whose family members and close relatives could take advantage of their positions and be connected to money laundering activities or manipulations of the market at the same time. The AML regulatory reporting service provider shall make a report on such clients' activities, preventing further illicit activities.

Beneficial Ownership Reports

AML regulatory reporting shall also make a report on the beneficial owner details who are directly or indirectly connected to the company or enterprises. This method of AML regulatory reporting prevents the bad actors from hiding several benefits from illicit activities, either shell companies or other opaque structures of ownership.

How AML Regulatory Reporting Services Work

The steps involved with the AML regulatory reporting Services are

Customer data Collection (CDD, EDD)

Every financial organization shall conduct a program on customer due diligence to get detailed information about the customer they are dealing with. This includes the name, address, contact number, business profile, beneficiary details, history of the transactions, etc. With the help of risk assessment, financial institutions can assess various risks involved with the customers. This includes dealing with high-risk customers engaged in large-volume transactions internationally or with complex ownership structures. Thus, the financial institution installed an automated system to detect and alert high-risk clients engaged in suspicious or unusual activity.

Monitoring the Suspicious Activities

This involves the identification of suspicious activity by the customer. All financial institutions, with the growing advancement in technology, have now installed software to monitor the customer's transactions, thus showing a red flag if such illicit and unusual activity is found. It is not that all the suspicious activity is related to money laundering activity. Thus, the compliance officer of the institutions needs to verify the same by proceeding with further investigations.

AML reports filing

After conducting the investigations by the financial institutions, when the final results show that a reasonable suspicious activity has occurred, it is the obligation of the respective institutions to file a suspicious Activity Report and its effective due diligence of the customer risk profile before the appropriate regulatory concerned.

Submission period

Like any other submission of reports to the concerned authority, the organization has to meet the AML regulatory reporting and compliance requirements within a stipulated time to make it more effective and prevent any kind of sanctions on delay.

Record keeping

The financial institution needs to maintain a proper record of customer transactions, due diligence, and AML regulatory reporting for certain periods, meeting the requirements of AML regulatory reporting and compliance. These records maintained by the organization are later used for regulatory examinations.

Internal External Audits

Both internal and external audits help the company understand and evaluate the effectiveness of the AML compliance and regulations programs and AML regulatory reporting process. With the due process of audit, the financial institution can identify if any improvements are to be made to remain in tune with AML regulations.

Employee Training Awareness Program

It is suggestive that financial sectors conduct training on AML compliance and regulations to its employees so that employees gain a better knowledge on how to deal with anti-money laundering activities, thus contributing to the nation in fighting or preventing the exposure of anti-money laundering and terrorist financing.

Continuous monitoring

With the constant evolution of technology, money laundering tactics are becoming more complex to identify, and the financial institution, to remain updated and alert, should conduct AML compliance continuously. This can be done by the financial organization by continuously monitoring the customer risk profile, updating risk assessment, enhancing customer due diligence, etc.

List of Institutions to follow AML Regulatory Reporting

  • Banks and Financial Institutions.
  • Securities Firms and Broker-Dealers.
  • Money Services Businesses.
  • Casinos and Gaming Establishments.
  • Insurance Company.
  • Real Estate Professionals.
  • Jewellery and dealers in Precious Metals.
  • Law Firms and Accountants.
  • Virtual Asset Service Providers.
  • Non-profit Organisations.

AML Regulatory Reporting Bodies You Should Know About

  • FATF (Financial Action Task Force)-Global.
  • EU-5AMLD and 6AMLD- European Union- Fifth Anti-money laundering Directive and Sixth Anti-money Laundering directive.
  • FCA (The Financial Conduct Authority)- United Kingdom.
  • BSA (Bank Secrecy Act)- The United States.
  • FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).
  • CBIRC (China banking and Insurance regulatory Commission)
  • AUSTRAC (Australia Transaction Report and Analysis Center).
  • MAS (Monetary Authority of Singapore).
  • HKMA (Hong Kong Monetary Authority)
  • FIU (Financial Intelligence Unit)-India.
  • FSA (Financial Services Agency)- Japan.

What are the Challenges With AML Regulatory Reporting?

Some of the major challenges faced by the AML regulatory reporting service providers are

Complexity of Transactions

Financial institutions are a huge market spread across the globe. AML jurisdictions vary from country to country, and it is indeed difficult and complex for financial institutions to adapt to the constantly changing laws and regulations.

Cross border Transactions

The transactions of the customer through the financial institution are carried across the border; this cross-border transaction includes various challenges for the organization, such as dealing with multiple jurisdictions, often time-consuming, thus slowing down the process of anti-money laundering reporting solutions, which is a Regulatory framework. Cross-border transactions involve connecting and coordinating with foreign authorities and local regulations, complying with legal requirements in various other countries.

Volume of data

The service provider on AML regulatory reporting shall ensure that the customer details are relevant and accurate since they need to investigate before filing the reports. Any data of the customer that shows inaccurate and incomplete data will delay the time of reporting.

Constantly evolving regulations

AML regulations are complex and evolving often. It is the responsibility of the financial institutions and compliance team to make sure that the AML regulations are interpreted correctly and thus prevent certain delays whenever the regulations change.

Customer due diligence

In identifying the details of the high-risk customer and its verification, the procedure is to be conducted very diligently. This intense customer due diligence requires additional resources and time.

Data privacy concern

When a financial organization collects data from customers, they should indeed make sure that such data of the individuals are protected as this data of the customer can be utilized for committing a crime by other individuals or a group, hiding their real identity.

Emerging technologies

Nowadays, technology is playing a significant role in the financial sector, and financial institutions need to adopt new technologies to stay relevant in the market. With technological advancement, the finance sector can stay ahead of the emerging risks and thus enhance its capabilities.

Regulatory Bodies for AML Regulatory Reporting

According to the Prevention of Money Laundering, all the service providers are required to register with the FIU-IND as reporting entities. The FIU-Ind is a central nodal agency that receives information about suspicious activities from the organization's AML regulatory reporting team or companies’ management. However, FIU-Ind is implemented by the Government of India as a financial intelligence to fight or combat money laundering and illegal activities connected throughout the global, national, and regional network.

Benefits of AML Regulatory Reporting Service

The AML regulatory reporting service helps financial companies mitigate financial crimes and thus ensures that financial institutions achieve compliance with AML regulations.

Given below are the benefits of the AML regulatory reporting requirements

  • It is vital for the financial organization to ensure that they have a comprehensive AML program to detect and identify illicit activities and suspicious customer activities. To make sure that the industry meets the AML compliance and regulations to its best industry practice.
  • A risk-based approach needs to be adopted by the financial institutions as a whole and reporting. With the implementation of the risk-based approach, the company can identify high-risk customers and money laundering activities beforehand and accordingly prioritize efforts.
  • To strengthen the procedure of knowing your customers, financial institutions need to conduct this KYC upon onboarding customers to identify customers' details and enhance due diligence of the high-risk customer profile. The customer details are to be updated regularly, when necessary, especially for high-risk clients.
  • A transaction monitoring based on an advancement system is to be operated by the financial company to detect and identify suspicious illegal activities, thus reducing and mitigating the false positives and hence saving the time of the AML compliance team, resulting in a comprehensive customer experience.
  • The financial organization shall conduct a program to train the employees on how to detect and identify suspicious activity reporting. This will give immense knowledge to the employees of the respective organization to comply with the regulatory requirements.
  • A financial institution needs to ensure that currency transaction reports are submitted electronically to the concerned regulatory authority. Whenever there is a transaction of a large volume exceeding the threshold, the regulatory shall make such a report to the authority concerned.
  • Regular employee training and awareness programs are to be conducted by all the organizations to ensure that employees of all the departments are knowledgeable about AML compliance, reporting regulations, etc.
  • Companies should have robust internal controls and oversight methods to look after the anti-money laundering compliance regulations. Institutions are to conduct regular audits in order to identify the weaknesses and improvements within AML compliance.
  • To improve the fight against money laundering activities across the globe, financial institutions are required to collaborate with other financial institutions and relevant concerned authorities so that information on emerging threats and suspicious activities is shared among them for a better understanding of anti-money laundering activities.

Enterslice AML Reporting Services

Enterslice is a consultancy firm that acts as a main provider of all compliance and regulatory frameworks for various institutional bodies. Our professionals are characterized by proprietary solutions with deep-rooted knowledge of operational and administrative services about risk management, governance, balancing, audit, legal advisor, risk and assurance, and all regulations concerned with various institutional bodies, both national and international.

We have professional experts who have gained immense experience in preventing and reporting suspicious activities as part of AML's regulatory reporting service. The services by Enterslice have been strengthening continuously over time, with hands-on experience with multiple services. AML regulatory reporting is a very delicate part of the AML compliance and regulations program. Enterslice has a deep understanding that such information given by the customers is to be dealt with with utmost care and diligence with a robust anti-money laundering program. Enterslice professionals also make sure that an organization stays updated about AML regulations and thus stays relevant in the market.

Frequently Asked Questions

Regulatory reporting in AML is a process under AML compliance to make a report to the appropriate authority on suspicious activities and certain transactions that exceed the threshold.

This AML reporting process is a procedure to be adopted by the companies and financial institutions on a systematic approach to meeting the legal obligations under the anti money laundering Act.

Enterslice provides anti-money laundering services by designing a framework as per the industry standards to help minimize the illegal activities or risks involved with money laundering. Our professionals shall also ensure that organizations meet the compliance requirements.

The main key objective of AML regulatory reporting is to help companies and financial institutions fight against the risks and offences associated with money laundering and terrorist financing.

Anti-money laundering is a method to mitigate against financial crimes. However, KYC means knowing your customer; it is a procedure to identify the risk in the customer by collecting the customer's details.

In India, the AML is regulated under the SEBI(Securities Exchange Board of India) and RBI (Reserve Bank of India).

The four pillars of AML are internal policy development, controls and procedures, AML officer designation who is responsible for the AML program, training, and awareness of the employees.

The three stages of money laundering are Placement, Layering and integration/extraction.

Sanctions in AML are one of the crucial compliances under the anti-money laundering program. This involves checking the customer's details and transactions with various individuals’ entities, companies, or countries that are prohibited under national and international laws.

The red flag in KYC under the anti-money laundering program is an alert or signal if any transactions are linked to money laundering activities. It is one kind of warning to the organization that illegal activities over the transactions of funds are popping up.

KYC sanctions are the actions taken by the government and commerce of the respective country to prevent any person from having an official interaction or transaction with a country that has violated international laws.

The basic time taken for KYC verification is up to seven days or more, as per the discretion of the institution.

The full form of KYC is to know your customer.

KYC or Know Your Customer has different types; the most common types of KYC are offline KYC, IPV(Person verification) and eKYC(Aadhar-based KYC).

In the global scenario, the AML is monitored by the FATF(the Financial Action Task Force), whereas in India, AML is monitored by the FIU-IND (the Financial Intelligence Unit of India) under the Ministry of Finance to combat money laundering activities or financial crimes.

Anti money laundering programs are to be implemented by organizations that deal with audit, tax services, finance, insolvency, sole practitioner, trust or company services, etc.

The five sanctioned countries are Ukraine, Cuba, Iran, North Korea, and Syria.

The full form of OFAC is Office of Foreign Assets Control.

OFAC is an administration that controls and enforces an economic sanctions program against the countries and groups of individuals that are associated with terrorist financing, drug traffickers, etc.

In India, under the Ministry of Finance, FIU-IND (Financial Intelligence Unit of India) is the institution responsible for mitigating financial crimes.

The three very important types of customer due diligence are standard CDD, Simplified CDD, and Enhanced CDD.

Cdd means customer due diligence, and EDD means enhanced due diligence; these are both key elements of KYC that are necessary to prevent money laundering activity through the financial organization.

CDD checklist is the structure on how to identify the risk involved with the customer transactions and their relationship.

Enhanced due diligence is a complex process adopted by the financial company to identify the risk of customers' money laundering activities.

KYC is also known as Know your Customer; this KYC procedure is to identify the customer details by performing various due diligence procedures.

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