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• TRAINING ON ANTI-MONEY
LAUNDERING/COUNTER TERRORIST
FINANCING (AML/CFT) COMPLIANCE
 TRAINING ON ANTI-MONEY LAUNDERING/COUNTER TERRORIST FINANCING (AML/CFT) COMPLIANCE

SESSION 1: GOVERNANCE AND COMPLIANCE

PRESENTATION BY:
MR. T. NHUNDU
MARCH 2023
CONTENTS

1. FATF Recommendation(s)
2. Zimbabwe Regulatory Framework
3. Role of the board: AML/CFT Compliance
4. Role of Senior Management: AML/CFT Compliance
5. Responsibilities of MLRO in AML/CFT Compliance
6. Engage Us!!!
FINANCIAL ACTION TASK FORCE (FATF), REGIONAL FATF-
STYLE BODIES AND ASSOCIATE MEMBERS

 FATF is an inter-governmental body (37 members from all over the globe), established by G-7 countries in 1989.

• Mandate is to:

• Set international standards against money laundering and financing of terrorism.

• Develop and promote policies to combat money laundering and terrorist financing.

• Undertake typologies to identify emerging ML/TF risks.

• assess and monitor its members for compliance with the set standards.

• FATF brings together experts from the public sector across its membership in the process of developing its policies and setting of
international standards.

• Associate members WB, IMF, Wolfsberg Group, Egmont among others

• FATF -Style Regional Bodies: EAG, APG, CFATF, ESAAMLG,GIABA, GAFILAT, MENAFATF, MONEYVAL
 FATF RECOMMENDATIONS

Preventive Measures-
AML/CFT Policies and Coordination Terrorist Financing and
• .(Risk-Based Approach to issues of
Designated Categories of
Financing of Proliferation
Knowledge and Criminal
Liability for ML offenses as a
Offenses that serve as ML
ML/TF and domestic cooperation) –Rec- should be criminalized –Rec result of “wilful blindness”
predicates –Rec 3 and 4 Customer Due Diligence (CDD)
1 and 2 5 and 8
measures-Rec 9 to 11

Expanded Coverage of
Additional Customer Due Diligence on
Reliance on third parties- Suspicious Transaction Industries to include
Specific Customers and Activities(PEPS,
MVTS, New Technologies) –Rec 12 to 16 Rec 17 Reporting –Rec 20 to 21 Casinos, Real Estate Agents,
Lawyers, etc. Rec 22 to 23

Transparency and Beneficial Powers and Responsibilities of

Ownership of Legal Persons
and Arrangements to be
scrutinized-Rec 24 to 25
Competent Authorities International Cooperation in
overseeing financial institutions ML/TF –Rec-36 to 40
to be enhanced and monitored-
Rec 26 to 28

Over 40%of the FATF Recommendations apply to the private sector (Preventive measures R.9-23) and Targeted Financial Sanctions R.6-7

www.fatf
TECHNICAL COMPLIANCE

• Has the jurisdiction:

• Enacted laws and regulations that contain the required provisions
(e.g. offences and preventive measures)
• Established the appropriate competent authorities
• Given the authorities the relevant powers
• Undertaken a national risk assessment
RATINGS FOR COMPLIANCE

• .
Compliant C There are no shortcomings

Largely compliant LC There are only minor shortcomings

Partially compliant PC There are moderate shortcomings

Non-Compliant NC There are major shortcomings

Not applicable NA A requirement does not apply, due to the structural, legal or
institutional features of a country
Effectiveness Outcomes
Full technical compliance with standards does not necessarily mean that the
system is effective
1.ML/TF risks are understood and reactions are coordinated
2.International cooperation delivers valuable information
3.Supervisors monitor compliance commensurate with risks
4.Financial institutions apply preventive measures commensurate with risks
5.Beneficial ownership of companies and trusts is transparent
6.Financial intelligence is used appropriately
7.ML offences are investigated, prosecuted and sanctioned
8.Proceeds and instrumentalities of crime are confiscated
9.TF offences are investigated, prosecuted and sanctioned
10.Terrorists are prevented from raising, moving and using funds
11.Persons involved in proliferation of WMD are prevented from raising, moving or using funds
 RATINGS FOR EFFECTIVENESS

High
• . level of effectiveness The Immediate Outcome is achieved to a very large extent.
Minor improvements needed.

Substantial level of The Immediate Outcome is achieved to a large extent.

effectiveness Moderate improvements needed.

Moderate level of effectiveness The Immediate Outcome is achieved to some extent.

Major improvements needed.

Low level of effectiveness The Immediate Outcome is not achieved or achieved to a negligible
extent.
Fundamental improvements needed.
FATF Recommendation(s):
Compliance Function
Recommendation18- FI are required to implement
programmes against ML/TF : internal policies,
procedures, and controls:
 compliance management arrangements (including
the appointment of a compliance officer at the
management level);
 ZIMBABWE REGULATORY FRAMEWORK

Section 25 (2)(3)- Money laundering and Proceeds of Crime Act [Chapter 9:24]-Financial institutions and
designated non-financial businesses and professions shall:
 (a) designate a compliance officer at the management level to be responsible for the implementation of, and
ongoing compliance with, this Act by the institution, business, or profession.
 (b) Such compliance officer shall have ready access to all books, records, and employees of the institution,
business or profession concerned as is necessary to fulfill his or her responsibilities.
 Para 3(2)(3), Third Schedule of Statutory Instrument 100 of 2010 prescribes ;
 the educational qualifications and responsibilities of a compliance officer.
 Reporting structure- report to Risk, Audit & Compliance Committee
 Organisation working relationship- must not be related to the chief executive or managing director ;
 Resignation-without delay- report to SECZim and replaced within three months
 Role of the board AML/CFT Compliance

• The Board of Directors of an SMI has oversight accountability for approving policies and
procedures and monitoring the effectiveness of the AML/CFT/CPF Risk Management
and Compliance Program on a regular basis

• It is the responsibility of the Board to ensure compliance by the SMI and its employees
with the provisions of the MLPC Act and the SMI’s AML/CFT/CPF Risk Management
and Compliance Program.
 Role of Senior Management AML/CFT Compliance

• Effectiveness of the Compliance Function: FI Strategy document- budget

• Senior Management defined in section 13 of the MLPC Act
• Senior Management is responsible and accountable for exercising oversight on
the day-to-day implementation of the AML/CFT/CPF Risk Management and
Compliance Program
• Senior Management should ensure that AML/CFT/CPF Risk Management and
Compliance Program is adequate to mitigate ML/TF/PF risks and that it is
implemented effectively in all relevant business areas
 Role of Senior Management AML/CFT
Compliance…….
• Senior Management should ensure that:
a) an appropriately qualified person of sufficient competence appointed as an
MLRO/Compliance Officer to be responsible for the implementation of,
and ongoing compliance with, this Act by the institution;
b) the Commission is notified in writing of the appointment of an MLRO and
furnished with a detailed curriculum vitae of the MLRO and a full
description of the duties of the MLRO;
c) the MLRO is resident in Zimbabwe;
 Role of Senior Management AML/CFT
Compliance…….
d) the Commission is informed in writing of the termination of services of an
MLRO and provided with an explanation of the reasons for the termination,
within 15 days of such termination;
e) the MLRO is a member of Senior Management or reports directly to Senior
Management or the Board of Directors and does not report to the internal
auditor to avoid potential conflicts of responsibilities;
f) the MLRO has clear and documented responsibility and accountability for
designing the AML/CFT/CPF Risk Management and Compliance Program
 Role of Senior Management AML/CFT
Compliance…….
g) the MLRO and the internal auditor have adequate resources in terms of
people, data management systems and budget to implement and administer
the AML/CFT/CPF Risk Management and Compliance Program effectively
and to offer objective advice to the Board and Senior Management; and
h) any recommendations made by the MLRO, the internal auditor, and Senior
Management in respect of the AML/CFT/CPF Risk Management and
Compliance Program are acted upon in a timely manner.
 Responsibilities of MLRO in AML/CFT Compliance

 The responsibilities of MLRO should, among others, include the following:

a) ensuring that the AML/CFT/CPF risk assessment of the entity is developed,
documented, and approved by the Board;
b) developing a risk-based AML/CFT/CPF Risk Management and Compliance
Program;
c) keeping a register of all reports received from staff and a separate register
of all reports made to the FIU;
 Responsibilities of MLRO in AML/CFT
Compliance…….
d) ensuring a speedy and appropriate reaction to any matter in which
ML/TF/PF is suspected; advising and training management, the
Board(where relevant) and staff on the development and implementation of
internal policies, procedures, and controls on AML/CFT/CPF;
e) carrying out, or overseeing the carrying out of, ongoing monitoring of the
business relations and reviewing a sample of records and transactions for
compliance with this Guideline and the MLPC Act;
 Responsibilities of MLRO in AML/CFT
Compliance…….
f) promoting compliance with Guidelines issued by SECZim/FIU/FATF ,
including observation of the underlying principles on AML/CFT/CPF, and
taking overall charge of all AML/CFT/CPF matters within SMIs;
g) acting as a liaison officer between the SMI, the SECZ, and the FIU; and
h) developing and implementing a self-assessment of controls.
 Responsibilities of MLRO in AML/CFT
Compliance…….
• The reports from the MLRO should include information on significant
patterns or trends, self-assessment of controls and material changes thereto,
as well as remedial action plans or recommendations, if any, with
milestones and target dates for completion.

• Where appropriate, the MLRO should draw conclusions, offer advice, and
make recommendations about the overall structure and scope of the
AML/CFT/CPF Risk Management and Compliance Program.
Engage us!!!