Over two decades of AML training, I have heard many questions over and over again. I don’t mind this at all, and I like to think that I have refined my answers so that they are more succinct and helpful. But occasionally someone will ask something that I have not considered before. I was reminding a group about the importance of keeping a record of their important AML decisions. After all, in the risk-based AML environment in which we nearly all operate, you might need to demonstrate how you came to the AML conclusion that you did. For instance, if you decide to accept a non-standard piece of identity documentation, or to downgrade the risk rating of a client from high to medium, or to hold off making a SAR about a client until they answer just one more request for information, you need to be able to show that your decision was appropriate and proportionate given the money laundering risk with which you were faced. If you like, it’s the administrative price you pay for being granted the latitude of a risk-based approach rather than having to operate under a more prescriptive regime.
All fine and dandy, said someone last week, but what if you leave the company where you were making all these important AML decisions, and you don’t take the records with you (of course). And then something changes – the company goes bust, or is taken over – and the records are gone. How then do you demonstrate, perhaps years later, that you did the right thing? What if it turns out that one of your clients was a money launderer, and your handling of their account is being questioned? How can you show that you did indeed apply the risk-based approach with diligence and professionalism?
I answered as best I could. In short, I said, the system is not perfect. But investigators and regulators will recognise and understand that former employees are not permitted to take records with them on departure. They will use all the legal weapons at their disposal to winkle those records out of the former employers’ file as part of their investigation, but this may not be possible. And the aim of investigators and regulators is not to set traps for the regulated: if you are doing a good job for your current employer, the assumption will be that you did a good one for your former employer. By this point, I realised that I might be flannelling a bit. What do you think? Does anyone have any more practical words of comfort? Has anyone – heaven forbid – found themselves in this situation?