Issue link: https://maltatoday.uberflip.com/i/1278887
maltatoday | SUNDAY • 16 AUGUST 2020 12 COMMERCIAL Protecting the integrity of the financial What are the main duties of a Money Laundering Reporting Officer (MLRO)? The main duty of the MLRO is to ensure that information considered to be tantamount to knowledge of, or suspicion of Money Laundering or Financing of Terrorism (ML/FT) is brought to the attention of the AML/ CFT Competent Authority, the Finan- cial Intelligence Analysis Unit (FIAU), for analysis. The MLRO is responsible for receiving reports from the *Sub- ject Person's employees who become aware of information or suspect any attempt to carry out ML/FT through the company's operations. The ML- RO is required to consider these in- ternal reports to establish whether the reported case provides sufficient grounds for the suspicion to subsist and eventually report the case as a Suspicious Transaction Report (STR). From time to time, the FIAU may request information from Subject Per- sons to provide information and it is part of the MLRO's duties to provide accurate and complete information promptly. What is the purpose behind this role, and why is it important that such a position exists? The role of MLRO emerges from the Prevention of Money Launder- ing and Funding of Terrorism Regu- lations (PMLFTR). The MLRO holds a key role in protecting the integrity of the financial system by preventing licensed entities from being exploited by criminals to launder the proceeds of crime or finance terrorism through the company's operations. What are the skills required to be an ef- fective MLRO? And what should a firm look for when engaging the services of an MLRO? The skillset required for this role includes knowledge of the services and activities provided by the Sub- ject Person, but more importantly, a thorough understanding of the ML/ FT risks associated with the services being provided. The MLRO should be aware of the vulnerabilities of the spe- cific sector, understand the risks and implement measures within the oper- ational framework of the company to counter any attempt for the company to be used in any phase of ML/FT. An in-depth knowledge of the require- ments of Legislation, Regulations and Implementing Procedures is a must. It is also essential for MLROs to follow the guidance issued by the Authorities and international standard setters in order to keep abreast with new ML/ FT typologies (the different types of ML/FT methods employed by crimi- nals). As indicated in the MFSA Guidance Paper on MLROs, it is of key impor- tance that the MLRO, not only has the necessary experience and knowledge of AML/CFT matters, but also has sufficient seniority and is free from conflicts of interest to take independ- ent action when this is necessary. It is important to highlight that prior approval by the MFSA is required for any individual to undertake the role of MLRO in a financial institution. effec- tively and efficiently. How high are the stakes we're talking about where money laundering is con- cerned? What are the legal or financial repercussions if an individual is found to be in breach of any regulations on this front? The consequences of allowing a li- censed firm to be used for money laundering or terrorist financing are "The MLRO holds a key role in protecting the integrity of the financial system by preventing licensed entities from being exploited by criminals to launder the proceeds of crime or finance terrorism through the company's operations" "We have seen significant investment in human and systems resources to carry out supervision with greater effectiveness" Interview with Stephen Galea, a Money Laundering Reporting Officer (MLRO) at the MFSA Stephen Galea