If you have employees, agents or other individuals authorized to act on your behalf, your compliance regime has to include training. This is to make sure that all those who have contact with clients, who see client transaction activity, who handle cash or funds in any way or who are responsible for implementing or overseeing the compliance regime understand the reporting, client identification and record keeping requirements. This includes those at the “front line” as well as senior management.
If you are a sole proprietor (not a corporation) with no employees, agents or other individuals authorized to act on your behalf, you are not required to have a training program in place for yourself. However, your policies and procedures must be in place, updated and will have to be reviewed every 2 years to test their effectiveness.
Your training program has to be in writing and you have to maintain it. This means that the program itself has to be in writing, but the way the training is delivered does not have to be in writing. For example, you could deliver your training program using computer-based software, information sessions, face-to-face meetings, etc. You also have to ensure that your training program is reviewed and adjusted in a timely manner to reflect your needs.
In addition, others who have responsibilities under your compliance regime, such as information technology and other staff responsible for designing and implementing electronic or manual internal controls, should receive training. This could also include the appointed compliance officer and internal auditors.
Standards for the frequency and method of training, such as formal, on-the-job or external, should be addressed. New people should be trained before they begin to deal with clients. All should be periodically informed of any changes in anti-money laundering or anti-terrorism legislation, policies and procedures, as well as current developments and changes in money laundering or terrorist activity financing schemes particular to their jobs. Those who change jobs within your organization should be given training as necessary to be up-to-date with the policies, procedures and risks of exposure to money laundering or terrorist financing that are associated with their new job.
The method of training may vary greatly depending on the size of your business and the complexity of the subject matter. The training program for a small business may be less sophisticated.
When assessing your training needs, consider the following elements:
- Requirements and related liabilities
The training should give those who need it an understanding of the reporting, client identification and record keeping requirements as well as penalties for not meeting those requirements. For more information about this, see the other guidelines regarding each of those requirements applicable to you.
- Policies and procedures
The training should make your employees, agents, or others who act on your behalf aware of the internal policies and procedures for deterring and detecting money laundering and terrorist financing that are associated with their jobs. It should also give each one a clear understanding of his or her responsibilities under these policies and procedures.
They need to understand how their institution, organization or profession is vulnerable to abuse by criminals laundering the proceeds of crime or by terrorists financing their activities. Training should include examples of how your particular type of organization could be used to launder illicit funds or fund terrorist activity. This should help them to identify suspicious transactions and should give you some assurance that your services are not being abused for the purposes of money laundering or terrorist financing.
Employees should also be made aware that they cannot disclose that they have made a suspicious transaction report, or disclose the contents of such a report, with the intent to prejudice a criminal investigation, whether it has started or not. They should also understand that no criminal or civil proceedings may be brought against them for making a report in good faith.
Background information on money laundering and terrorist financing
Any training program should include some background information on money laundering so everyone who needs to can understand what money laundering is, why criminals choose to launder money and how the process usually works. They also need to understand what terrorist financing is and how that process usually works.