The FIAU has just published a report of their findings following the Thematic Review which was carried out on the Provision of Directorship by Corporate Service providers in 2020. The review focused on CSP’s compliance with their AMLCFT obligations when providing directorship services focusing on the looking into the systems, processes and controls they have in place to identify, assess, and mitigate the inherent risks arising from providing such service.
The Thematic Review looked into obtaining an insight into the level of understanding of the inherent risks faced by the tested CSPs when providing Directorship services. The corresponding AMLCFT frameworks applied by such CSPs to assess and mitigate the inherent risks faced in relation to their provision of directorship services to their customers was also examined.
Areas of focus are on:
- Key inherent risk drivers SPs are exposed to when providing Director Services, and whether a comprehensive analysis of the inherent risks and controls were factored into their BRA. Emphasis placed into the geographic risk factors and whether the BRAs included a granular assessment of the jurisdiction that the SP may be exposed to by delving deeper into its customers various jurisdictional links as opposed to simply referring to generic categories e.g EU/EEA, non-EU/EEA.
- The review looked into the approach taken in the calculation of the Customer Risk Assessment, whether geographical risk factors were considered and whether the risks tied to the provision of directorship services as a product/service risk on its own instead of including this under the umbrella of CSP service were taken into consideration.
- Effective identification and verification of the customer with emphasis on the requirement to effectively understand the purpose and intended nature of the business relationship i.e. a thorough understanding of the reasons why a customer is requesting/using the CSPs service not only at the onset of the business relationship but throughout the relationship as part of the ongoing monitoring obligations of the CSP.
- The necessary Enhanced Due diligence carried out on Sow and SOF, highlighting examples of how the CSP can corroborate the Sow and SOF.
- Ongoing Monitoring of the business relationship and scrutiny of transactions as a key element in the CSPs risk assessment, touching upon systems and methods used by the CSP to monitor transactions.
The report encourages subject persons to go through the paper in order to ensure that they are indeed implementing the necessary systems and controls in order to avoid any of the weaknesses identified in the report.
Click on this link to view the report: https://bit.ly/3VsLkdz