2.1 Supervisory Mandate, Powers, and Responsibilities
The goal of AML/CFT supervision is to maintain the integrity of the financial system and protect it from illicit activities.
Supervisors should have the following powers:
- To monitor
- To conduct inspections
- To exact information
- To impose sanctions
Supervisors should have the following responsabilities:
- Define the framework
- Conduct risk assessments
- Monitor and supervise
- Provide guidance
- Coordinate with international actors
- Enforce the law
2.2 Access to Records
Supervisors should be authorized to compel production of, and have timely access to, any information relevant to effectively monitoring the management of ML/TF/PF risks:
- Types of records
- Timeframe
- Format of delivery
- Legal basis
2.3 Risk-based Supervisory Approach
A risk-based approach means that the level and intensity of supervisory activities are tailored to the risks posed by a financial institution or sector. Higher-risk institutions or sectors should be subject to more frequent and intensive supervision than lower-risk institutions or sectors.
- Conduct risk assessment.
- Institution profile
- Type of customers, services, and transactions
- AML/CFT framework
- Develop supervisory plan
- Frequency and scope of supervision
- Tools and techniques
- Customize activities
- Due diligence
- Transaction monitoing
- Suspicious activity reporting
- Collavborate with other relevant authorities
2.4 Resources and Expertise
More time and resources are devoted to the riskier financial institutions or sectors. The budget should allow for sufficient numbers of staff with skills and expertise commensurate with the risk profile and systemic importance of the supervised sectors. The budget should also be sufficient to cover regular staff training and technology tools needed to supervise.
- Legal expertise
- AML/CFT Knowledge
- Financial knowledge
- Communication skills
- IT skills
