Say it isn’t so

You know that I love MLROs.  They are quite possibly my favourite people in the world – apart from Donny Osmond, of course.  And Victoria Wood, particularly in “dinnerladies”.  I digress.  MLROs do a difficult job in adverse circumstances, often with a great deal of resistance and grumpiness from colleagues.  So on the whole I ♥ MLROs.  But I have to admit that if I were a criminal planning world domination (as they all surely do), I would make sure that I bought myself a really influential MLRO.  After all, the MLRO can not only make sure that no SARs mentioning me make it through to the authorities, but he can also adjust in-house procedures to my advantage, so that I am never asked impertinent questions or required to produce any pesky documentation.

What staff may not realise is that it is not obligatory to make SARs to their MLRO.  They must make SARs, of course, when they are suspicious, but if they fear that their MLRO has been turned, they are perfectly entitled to make their report direct to the FIU instead.  In fact, the MLRO was really only invented as a reporting convenience for staff, so that they didn’t have to hotfoot it with a SAR to their local cop shop – and the role grew from there.  So when I am training, I often mention this: if you’re worried that your MLRO is crooked, you can always report direct to the authorities.  It gets a laugh, and gives us the chance to talk a bit more about the purpose and use of SARs.  But recently a client, herself an MLRO, asked me to take that bit out of the training, on the basis – I’m guessing – that she didn’t want her staff to entertain the possibility of their MLRO being untrustworthy.  I can see her point of view – after all, perhaps it is not really a laughing matter – but isn’t informed caution better than blissful ignorance?  What do you other MLROs out there think?  Am I making fun of your integrity, or should staff be alerted to the possibility of criminal infiltration at the highest levels?

This entry was posted in AML, Due diligence, Money laundering and tagged , , , , , , , , , . Bookmark the permalink.

6 Responses to Say it isn’t so

  1. Tanguy, Nikki says:

    Hi Susan

    Definitely keep it in. It’s done in a light hearted way but actually gets a really important message across, that anyone can be corrupt. Staff should know that there are other options open if necessary, and the option to go direct to the authorities should be in all staff compliance manuals anyway so you are not telling them anything new!!


    Nicolla J Tanguy
    Managing Director

    Bank J. Safra Sarasin Ltd, Guernsey Branch
    Direct Dial +44 1481 739801

    • Hi Nikki
      You’re right that it’s an important message, that anyone can be (or become) corrupt. And it’s not just for SARs and AML – staff should also know that they can whistleblow [is that a verb?] on anything direct to the authorities, if they fear that their concerns will be hushed up in-house.
      Best wishes from Susan

  2. Roy McCarthy says:

    Well I never knew that. Or even thought about it to be honest. It’s a good point though, especially where diligent staff members might have filed several SARs which have been simply acknowledged and no further action taken. Though it would be a brave employee that risks their neck bypassing company procedure.

    • Dear Roy
      I hadn’t thought of that scenario – staff wondering why a perfectly good SAR seems to have gone nowhere. Of course, the MLRO is not required (or, in some circumstances, may not be permitted) to tell staff what has happened to their SAR, but if they do report something that seems to them to be fairly conclusive laundering and then the relationship with the client appears to continue without any adjustment, they might become concerned…
      But you’re right about it needing a brave soul to put their head above the parapet.
      Best wishes from Susan

  3. Graham Thomas says:

    Hi Susan

    One of the key elements of effective controls and checks is not to place too much reliance on one person, no matter which role they fill. I have personal experience of staff who have been valued and trusted over many years only for a change in circumstances etc to cause them to abuse their position of trust. It can be a very difficult and sensitive area to raise but I would hope that all professionals can understand that it is in everyone’s interests to have safeguards in place and it should be no different for MLRO’s.

    My vote is for you to leave this thought provoking element in your training.

    Best Wishes


    • Hi Graham
      You are right on the money here: placing blind trust in anyone is risky. And it is very wise to encourage staff to keep an avuncular (aunticular?) eye on colleagues, to look out for changes in behaviour that could indicate an alteration in their circumstances. Someone might become more snappy, or stressed, or weepy, or short-tempered, or generous than in the past – any of which could indicate a problem.
      Best wishes from Susan

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.