Procedures to facilitate internal reporting within designated persons
A key change introduced by the Regulations concerns the requirement that designated persons have in place "appropriate procedures" for their employees, or persons in a comparable position, to report a contravention of the CJA internally through a specific, independent and anonymous channel. The Regulations recognise that a bespoke approach is needed here. The nature of the reporting channel to be created will be informed by the size and profile of the particular designated person.
Designated persons will need to decide which persons in their organisation will require access to and training on the relevant reporting procedures. They will also need to be mindful of any outsourcing arrangements which may be in place. Training programmes will need to be updated to reflect the new requirements.
The Regulations confirm that competent authorities should apply a risk-based approach to supervision and ensure that their employees and officers have access to "relevant information" on ML/TF risks. The Regulations also provide some colour on how competent authorities should conduct their supervision activities.
Co-operation with AML supervisors in other Member States
Additional requirements are set out in respect of competent authorities who supervise designated persons. Such authorities have a duty to cooperate with competent authorities in other Member States to ensure the effective supervision of designated persons.
Criminal offence for failure to disclose conviction under the CJA
The Regulations create a criminal offence of failing to inform a competent authority where certain persons are convicted of offences under the CJA, or of other offences relating to banking, investment of funds and other financial activities. A designated person must report any such offence to their competent authority, which will be the Central Bank in the case of a financial services provider, or the Law Society in the case of a solicitor.