8.1.1 Appointment and Approval
Effective from 13/7/2023FIs are obliged to appoint a compliance officer (CO) with the appropriate competencies and experience to perform the statutory duties and responsibilities associated with this role. The AML-CFT Decision stipulates that the CO performs these duties “under his or her own responsibility”, referring to the independent nature of the function and from which it should be understood that the position should be at a management level.
FIs must take all appropriate steps to identify and to prevent or manage confilicts of interests between:
| • | The FI, its’ personnel including its CO, or any other representatives, including any person who is directly or indirectly associated with the organization and who has control to make decisions, and the FI’s customer. |
| • | The CO and senior management of the organization including the Board of Directors. The CO must be independent and must hold a position of sufficient seniority within the organization, to ensure informed decisions are made without undue pressure to challenge decisions that are considered ill-suited, to protect the organization from possible ML/TF abuse. The MLRO’s independence of judgement is required to be free from conflicts of interest, whether it is pecuniary or otherwise. |
The AML-CFT Decision further provides that the appointment of a person to the position of CO requires the prior consent of the relevant Supervisory Authority. Some FIs might also have appointed a Money Laundering Reporting Officer (MLRO).
In determining the competencies, level of experience, and organizational reporting structures that are appropriate for their COs, FIs should take several factors into consideration, including but not limited to:
| • | The results of the NRA and any topical risk assessment |
| • | The nature, size, complexity, and risk profile of their industries and businesses, as well as those associated with the products and services they offer and the markets and customer segments they serve; |
| • | The organisation’s governance framework and management structure, with particular consideration given to the independent nature of compliance as a control function; |
| • | The specific duties and responsibilities of the CO’s role (described below). |
Where appropriate, FIs may also consider engaging in dialogue with Supervisory Authorities, professional associations in their sectors, and industry peers, in relation to the competencies, experience, and governance structures that make for an effective compliance officer and an effective AML/CFT programme.