A couple of weeks ago, I promised you an occasional series of posts on the most frequently asked questions I get during AML training. I have already covered suspicion, so now it’s the turn of tipping-off. (For a start, I’m never sure whether to hyphenate or not – it varies from jurisdiction to jurisdiction. I feel like hyphenating today.)
The difficulty here is that tipping-off has different relevance to different people. For ordinary staff – who are generally the ones who get most exercised about it – it is actually very simple. To avoid exposing yourself to tipping-off, always make a report whenever you feel suspicious (you see now why I put the post on suspicion first) and then (here’s the tricky bit) zip your lip. It is now down to the MLRO to deal with the report, and decide who needs to be told what – and so for the MLRO, avoiding tipping-off is much more complicated. But for the individual member of staff, it’s straightforward: put in your report and then shut up about it.
The MLRO cannot live by such a simple mantra. He has to decide who needs to know about the report, e.g. other people who deal with that client, the Board, the relevant FIU. He has to guide the relevant people in how to deal with the client from this point onwards. And he has to keep a careful record of all his deliberations and decisions. So my training sessions with MLROs can become quite heated when they’re looking at the sharp end of two/five years for getting it wrong. That said, there are extremely low conviction rates for tipping-off in every jurisdiction – I think law enforcement agencies realise that the best policy is to encourage the regulated sector to support the AML regime, not be scared witless by it.
To read that earlier post I mentioned, about suspicion, click here.