What is a Periodic Report under the AML compliance function, and how should such a periodic report be prepared?
The periodic report is generally known as the Compliance Officer’s semi-annual AML/CFT report, a crucial element of the AML compliance process.
Generally, the senior management of the regulated entities does not get involved in routine AML/CFT tasks but has been entrusted with ensuring the implementation of the AML/CFT program across the organisation. In this context, to ensure senior management is aware of the organisation’s AML/CFT measures, the UAE AML regulations mandate that the Compliance Officer prepare and submit a periodic AML/CFT Compliance Officer report to the senior management.
As per Cabinet Decision No. 10 of 2019, the Compliance Officer must prepare and submit this periodic AML report twice a year to the senior management. Further, senior management must review this report and provide feedback to the Compliance Officer to enhance the AML function. Further, a copy of this AML report is to be furnished to the concerned supervisory authority, as instructed.
While preparing this semi-annual AML/CFT report, the Compliance Officer should ensure a holistic view of the AML function and status of compliance with applicable laws is presented to the management.
The periodic AML Compliance Officer’s Report must cover a brief about AML regulatory changes during the period affecting the Company’s operations and necessary amendments made to the AML policies and procedures.
The report must also provide a brief about the customer due diligence measures performed during the period, the number of high-risk customers onboarded, customers rejected, and any matches found with sanctions lists. Further, the Compliance Officer must include key statistics, such as a high-level summary of transactions based on the nature of risk, training conducted and attended by the team, etc. The report must also include information on the reports filed on the FIU’s goAML portal and an overview of the suspicions observed.
Additionally, the Compliance Officer must include any AML/CFT gaps or weaknesses identified by him and the action taken to remediate the same. Further, if the Compliance Officer is of the view that additional resources are required for AML/CFT compliance, then the same must also be mentioned in this report.
A half-yearly report can be prepared section-wise, and the above-mentioned information for the respective period can be captured in separate sections of the report (for example, semi-annual reports for the period January to June 2024 & July to December 2024).
Check out our infographic on the elements of the AML Compliance Officer’s periodic report to learn more about the topic and adequately draft your report: