With over 15 years of experience in Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), we offer a UK AML/CFT audit solution to financial institutions (FIs), designated non-financial businesses and professions (DNFBPs), and other relevant persons, helping them comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), including the AML/CFT audit requirements outlined in Regulation 21 for an independent audit function.
Independent AML Auditors’ Requirements in the UK
If you search for UK AML auditors online, many claim to be experts, using puffery language that AI chatbots may generate, and so on and so forth.
We are not just another AML/CFT audit provider firm that claims to have extensive knowledge of UK AML compliance.
We are the ones who know what we are doing, with years of experience in all aspects of AML/CFT compliance, including:
- Creating and successfully enhancing anti-money laundering and counter-terrorist financing frameworks for different businesses tailored to their specific product, resources, risk appetites, and sector-specific money laundering and terrorism financing (ML/TF) risks
- Conducting AML/CTF risk assessments across a wide range of reporting entities
- Managing the first, second, and third lines of AML/CFT compliance and management
- Conducting internal AML/CFT audits that exceed statutory requirements
- Acting as external AML/CFT auditors for FIs and DNFBPs
- Successfully assisting businesses in undergoing statutory AML/CFT reviews, including those conducted by leading auditors. We know a thing or two about good and bad AML auditors
- Providing legal advice to AML/CFT reporting entities. Representing AML/CFT reporting entities when issues arise, including coordinating their risk and compliance teams, legal teams, external lawyers, and operations teams
- Assisting businesses with FCA and other AML supervisors' reviews
- Assisting UK reporting entities with their AML/CFT remediation
UK AML Supervisors’ Expectations
There are expectations regarding AML/CFT auditors' expertise set by the UK AML/CFT Supervisors:
- Financial Conduct Authority (FCA)
- HM Revenue & Customs (HMRC)
- Professional Body Supervisors – such as the Solicitors Regulation Authority (SRA) for law firms, ICAEW, or other accountancy bodies for accountants, etc.
These expectations include, but are not limited to:
- The products and services you offer
- Your money laundering and terrorist financing (ML/TF) risk level
- The size of your business
- The available resources
- The governance structure
- Your client base
- Your countries of operation
- The delivery channels for your services
We possess the necessary expertise to complete AML/CFT independent audits and understand what businesses seek from their AML/CFT auditors.
UK AML Audit Solutions’ Scope
We offer our independent AML audit solution to different types of relevant persons as defined in MLR 2017, including but not limited to:
- Investment bankers
- Investment firms
- Fund managers
- Brokers, including forex brokers
- Cryptoasset Businesses
- Fintech companies
- Building Societies
- Non-Bank Deposit takers
- Non-bank lenders
- Online casinos and gambling platforms
- Currency exchange providers
- E-money issuers
- Money remitters
- Payment gateway providers
- Derivatives issuers and platforms
- Neo-banks
- P2P lending platforms
- Crowdfunding services and platforms
- Financial advisers
- Investment advisers
- Wealth managers
- Custodial or depository service providers
- Consumer credit providers
- Credit unions
- Corporate finance providers
- Finance companies
- Designated non-financial businesses and professions (DNFBPs), including trust and company formation providers (TCSPs)
UK AML Audit Focus
We cover compulsory AML/CFT audit requirements as outlined in the MLR 2017, along with guidance from the FCA, HMRC, and other UK AML/CFT supervisors. Our focus areas include, but are not limited to:
- AML/CFT Risk Assessment Audit, including a review of:
- Whether it identifies the risks faced by your business
- Whether there are checks in place to ensure it is up to date
- Whether it enables you to determine the level of risk involved in relation to various AML/CFT obligations. We cover the five key ML/TF risk areas: products, size and complexity, delivery channels, the countries you engage with, and the institutions you deal with (including regulations 18 and 18A, MLR 2017)
- AML/CFT Programme Audit, including a review of:
- Whether your AML/CFT programme is functioning in practice as intended (including regulations 19 to 21, MLR 2017)
- Whether it complies with the requirements outlined in part two, chapter two of MLR 2017
- Whether you comply with your obligations under the MLR 2017, including, but not limited to:
- Initial customer due diligence requirements, including, simplified, standard, and enhanced due diligence (part 3, MLR 2017)
- Screening
- Beneficial ownership identification (including parts 5 and 5A, MLR 2017)
- Record-keeping (regulation 40, MLR 2017)
- Customer risk rating
- Ongoing customer due diligence
- Transaction monitoring, covering the detection and handling of large, unusual, and suspicious transactions and patterns
- Reporting timeliness and accuracy
- Governance and oversight
- Staff vetting and training
- Obligations covering the detection, escalation, and reporting of suspicious activities (SARs), along with other statutory reporting obligations
- AML/CFT Framework Application Audit, including the following areas:
- Whether the policies, procedures, and controls based on your AML/CFT Risk Assessment have been adequately designed and operate effectively
- Conducting limited assurance testing of AML/CFT controls, including but not limited to CDD, ODD, and transaction monitoring, record-keeping, etc. (including provisions of part two, chapter two, MLR 2017)
- Verifying the operational effectiveness of reporting systems (regulation 21, MLR 2017)
- Assessing the extent to which employees understand and comply with your AML/CFT programme (regulation 24, MLR 2017)
- The implementation of your AML/CFT programme or equivalent arrangements by subsidiaries, branches, subsidiaries, and outsourced providers (including regulations 19 and 39, MLR 2017)
- Reviewing how any previously identified deficiencies or non-compliance areas have been addressed
- Assessing the adequacy of your AML/CFT employee training programme
- Reviewing the approach to transaction monitoring scenario setting, parameters, and threshold calibration for ongoing effectiveness
- Accepted AML/CFT Guidance: Whether Risk Assessment, AML/CFT Polices and other key AML/CFT protocols are based guidance materials accepted by UK AML/CFT supervisors (e.g. Financial Crime: A Guide for Firms, Joint Money Laundering Steering Group (JMLSG) Guidance, etc.)
UK AML/CTF Audit Methodology
We can select and apply an appropriate methodology that works for your business or conduct an anti-money laundering audit using your audit methodology.
UK AML/CFT Audit Frequency
The frequency of AML/CFT audits in the UK depends on factors such as the size and complexity of your business, the products and services you offer, and your assessed ML/TF risk levels.
AML/CFT audits are generally scheduled based on a risk-based approach, with higher-risk entities often opting for more frequent audits, such as annual reviews. Supervisors such as the FCA, HMRC, or Professional Body Supervisors may also require additional audits if significant risks or compliance issues are identified.
UK AML Compliance and Triggers for Independent AML Audit
A requirement for an AML/CFT Audit in the UK may be triggered by several factors, including:
- Structural changes to your business
- Changes to the ML/TF risk of your business
- Changes in fund deposit or withdrawal methods
- Changes in outsourcing arrangements for ML/TF prevention functions
- Substantial changes to the AML/CFT Programme
- Changes to the number or volume of transactions
- Substantial changes in markets of operations and customer types
- Introduction of new products
- Substantial updates in UK AML/CFT requirements, FCA guidance or industry-specific regulations that impact the AML/CFT compliance framework of an organisation
- Changes in delivery methods for your services
- AML/CFT remediation issues faced/completed by the business
Regulation 21 Compliant AML/CFT Audit Reports
We produce comprehensive AML/CFT audit reports with findings and actionable recommendations. These reports include:
- What was tested during the audit
- The methodologies employed in conducting the tests
- The sample sizes utilised in the testing process
Our reports are crafted to offer senior management and, where applicable, the governing board clear insights into compliance performance as per the MLR 2017 requirements.
Depending on your expectations, we can also cover the UK AML/CFT supervisors' accepted guidance and industry practice.
We understand what balancing compliance obligations with operational efficiency is and what it means to apply a risk-based approach to AML/CFT in different circumstances, giving us the required expertise to draw appropriate conclusions about your AML/CFT compliance.
UK AML Audit Programme & Audit Stages
The UK AML Audit process generally involves:
- Initial Meeting & Scope Definition:
- Defining the scope and objectives of the audit with the relevant person.
- Understanding the entity's business, risk profile, and existing AML/CFT program.
- Documentation Review: Reviewing key AML/CFT documents.
- Sampling & Testing: Performing sampling and testing of compliance with the UK Money Laundering Regulations 2017 (MLR 2017) and the AML/CFT program. Examples include:
- Testing CDD procedures (customer identification & verification).
- Reviewing transaction monitoring alerts and SAR investigations.
- Assessing the effectiveness of the risk assessment process.
- Interviews & Inquiries:
- Interviewing key personnel (MLROS, compliance managers, management, front-line staff).
- Inquiring about the implementation and effectiveness of AML/CFT controls.
- Application of Audit Methodology:
- Applying appropriate audit methodologies, such as risk-based auditing, to assess the effectiveness of the AML/CFT program.
- Report Preparation & Presentation:
- Preparing a comprehensive audit report.
- Presenting findings, conclusions, and recommendations to management.
AML/CFT Audit and Information Sampling
UK AML audit requirements focus on evaluating how effectively a relevant person complies with its obligations under the MLR 017 and its key AML/CFT policies, controls and procedures. Independent audits typically involve reviewing samples of:
- Individual customers, including resident and non-resident clients, various types of corporate clients (e.g., limited liability companies, limited partnerships, and entities with complex beneficial ownership structures), as well as trusts and investment vehicles.
- Customers presenting different ML/TF risks, including those categorised as medium- or high-risk.
- Large, complex, or unusual transactions to determine how effectively the entity meets its transaction monitoring obligations.
- Ad-hoc and periodic reports on customer transactions and activities, such as Suspicious Activity Reports (SARs), to assess MLR 2017 reporting obligations.
- AML/CFT training and staff vetting records.
- Specialised client and transactional registers (e.g., high-risk clients, politically exposed persons (PEP) registers, etc.).
- Materials aimed at enhancing ML/TF risk awareness and operational compliance.
- Records maintained for specific clients and/or transactions to verify compliance with record-keeping obligations under the regulations.
UK AML Audit Solutions Tailored to Your Needs
When it comes to delivery, we:
- Focus on clear, concise, and objective assessments. No ego, no attitude, no puffery, and no jargon.
- Have real knowledge of AML/CFT compliance and how each aspect works.
- Use a client-centric approach. We understand the difference between your risk appetite, internal procedures, and AML/CFT requirements.
- Cause minimal interruptions to your business (combining onsite and remote engagements).
- Provide comprehensive audit reporting.
When it comes to flexibility, we:
- Offer realistic pricing options.
- Tailor our approach to your specific needs and risk profile, offering limited assurance, reasonable assurance, and holistic options. We offer AML audit solutions to:
- Small businesses and startups.
- Mid-sized businesses.
- Business groups, including those with centralised compliance functions across subsidiaries, those operating across different compliance regimes, and offering a range of products.
- High-risk corporates that come under regulatory scrutiny and pressure from important stakeholders, such as banking partners, insurance providers, and payment channels.
UK AML/CFT Audit Preparation
We offer a comprehensive Internal AML Review Solution with the following features:
- Deeper Audit Focus:
- Evaluating the effectiveness of your AML/CFT compliance against your business goals, future objectives, wider risk appetite, and more.
- Deep diving into the effectiveness of AML/CFT controls.
- Covering specific review areas such as AML technology, process optimisation, and more.
- Flexible Scope: Designed with a flexible audit scope, which can be customised to your needs, as opposed to the AML/CFT Audit under the UK Money Laundering Regulations 2017.
- External Audit Preparation: Focused on internal improvement and identifying issues before external scrutiny, helping you prepare for an AML audit or an enhanced review by a banking partner.
- Regulatory Review Preparation: Focused on preparing you for a review by FCA, HMRC, or another UK AML supervisor.
- Non-binding Findings: The audit report is confidential, giving you the opportunity to address any identified issues discreetly.
- More information: Visit our Internal AML Review Solution page for more information.
Related AML/CTF Solutions
In addition to our UK AML/CFT audit option, we offer a comprehensive set of AML/CTF compliance solutions, helping you navigate the complexities of UK AML requirements in a commercially oriented and goal-focused manner, providing effective support for all aspects of anti-money laundering compliance. Our focus areas include, but are not limited to:
- AML/CTF Advisory: We provide advisory solutions on a wide range of AML/CTF matters and issues. Visit our AML/CFT Advisory page for more.
- AML/CTF Compliance Management: We can fully manage your anti-money laundering and terrorist financing compliance. Visit our AML/CFT Compliance Management page for more.
- AML/CTF Risk Assessments: We conduct, review, and help businesses implement AML/CTF Risk Assessments that form the foundation of effective AML/CTF Programs. Visit our AML/CTF Risk Assessment page for more.
- AML/CFT Programs: We draft, review, and help businesses implement an AML/CFT Programme based on the ML/TF risk assessment outcomes. Visit our AML/CTF Programme page for more.
- AML/CTF Reg-tech Solutions: We help with AML/CTF technology integration tailored to your circumstances.
- AML/CTF Training: We offer specialised AML/CTF training solutions for different relevant persons under the MLR 2017 (FIs, DNFBPs, and other types of AML/CFT reporting entities). Visit our AML/CFT Training page for more.
- AML/CTF Procedures: We assist in developing and enhancing AML/CTF procedures tailored to your business needs, focusing on effective AML risk management across business processes.
- AML Manuals and Guidelines: We create and refine practical resources such as AML operating manuals and guidelines that provide step-by-step instructions to ensure efficient AML/CTF compliance based on your business size and complexity
- ML/TF Controls Mapping: We help map, assess, and enhance internal ML/TF controls to ensure compliance, address financial crime risks, and respond to findings from AML/CTF audits and supervisors.
- AML Red Flag Protocols: We develop guidelines for identifying and responding to red flags, enabling timely action against fraud, money laundering, and terrorist financing activities under various operational circumstances.
