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Location: Central Bank of Bahrain Volume 5—Specialised Licensees > Common Modules (Applicable to all Specialised Licensees) > Part A > Business Standards > FC Financial Crime > FC-4 Money Laundering Reporting Officer (MLRO) > FC-4.3 Compliance Monitoring > Annual Compliance Review > FC-4.3.2B
  • Annual Compliance Review

    • FC-4.3.1

      A licenseeG must review the effectiveness of its AML/CFT procedures, systems and controls at least once each calendar year. The review must cover the licenseeG and its branches and subsidiaries both inside and outside the Kingdom of Bahrain. The scope of the review must include:

      (a) A report, containing the number of internal reports made in accordance with Section FC-5.1, a breakdown of all the results of those internal reports and their outcomes for each segment of the licensee'sG business, and an analysis of whether controls or training need to be enhanced;
      (b) A report, indicating the number of external reports made in accordance with Section FC-5.2 and, where a licenseeG has made an internal report but not made an external report, noting why no external report was made;
      (c) A sample test of compliance with this Module's customer due diligence requirements; and
      (d) A report as to the quality of the licensee'sG anti-money laundering procedures, systems and controls, and compliance with the AML Law and this Module.
      October 2010

    • FC-4.3.2

      The reports listed under Subparagraphs FC-4.3.1 (a) and (b) must be made by the MLRO. The sample testing required under Subparagraph FC-4.3.1 (c) must be undertaken either by the licensee'sG internal auditor, its external auditor or a consultancy firm approved by the CBB. The report required under Subparagraph FC-4.3.1 (d) must be made by the licensee'sG external auditor or a consultancy firm approved by the CBB.

      Amended: April 2012
      October 2010

    • FC-4.3.2A

      In order for a consultancy firm to be approved by the CBB for the purposes of Paragraph FC-4.3.2, such firm should provide the CBB's Compliance Directorate with:

      (a) A sample AML/CFT report prepared for a financial institution;
      (b) A list of other AML/CFT related work undertaken by the firm;
      (c) A list of other audit/review assignments undertaken, specifying the nature of the work done, date and name of the licensee; and
      (d) An outline of any assignment conducted for or in cooperation with an international audit firm.
      Added: April 2012

    • FC-4.3.2B

      The firm should indicate which personnel (by name) will work on the report (including, where appropriate, which individual will be the team leader) and demonstrate that all such persons have appropriate qualifications in one of the following areas:

      (a) Audit;
      (b) Accounting;
      (c) Law; or
      (d) Banking/Finance.
      Added: April 2012

    • FC-4.3.2C

      At least two persons working on the report (one of whom would normally expected to be the team leader) should have:

      (a) A minimum of 5 years professional experience dealing with AML/CFT issues; and
      (b) Formal AML/CFT training.
      Added: April 2012

    • FC-4.3.2D

      Submission of a curriculum vitae for all personnel to be engaged on the report is encouraged for the purposes of evidencing the above requirements.

      Added: April 2012

    • FC-4.3.2E

      Upon receipt of the above required information, the CBB Compliance Directorate will assess the firm and communicate to it whether it meets the criteria required to be approved by the CBB for this purpose. The CBB may also request any other information it considers necessary in order to conduct the assessment.

      Added: April 2012

    • FC-4.3.3

      The reports listed under Paragraph FC-4.3.1 must be submitted to the licensee'sG Board, for it to review and commission any required remedial measures, and copied to the licensee'sG senior management.

      October 2010

    • FC-4.3.4

      The purpose of the annual compliance review is to assist a licensee'sG Board and senior management to assess, amongst other things, whether internal and external reports are being made (as required under Chapter FC-5), and whether the overall number of such reports (which may otherwise appear satisfactory) does not conceal inadequate reporting in a particular segment of the licensee'sG business (or, where relevant, in particular branches or subsidiaries). LicenseesG should use their judgement as to how the reports listed under Subparagraphs FC-4.3.1 (a) and (b) should be broken down in order to achieve this aim (e.g. by branches, departments, product lines, etc).

      October 2010

    • FC-4.3.5

      LicenseesG must instruct their appointed firm to produce the report referred to in Subparagraph FC-4.3.1 (d). The report must be submitted to the CBB by the 30th of April of the following year. The findings of this review must be received and acted upon by the licenseeG .

      Amended: April 2012
      October 2010

    • FC-4.3.6

      The appointed firm may rely upon work performed by the licensee'sG internal audit function, as part of their procedures for producing the statement referred to in Paragraph FC-4.3.5.

      Amended: April 2012
      October 2010

    • FC-4.3.7

      The four reports referred to in Paragraph FC-4.3.1 must be submitted to the Director, Compliance Directorate of the CBB by the 30th of April of the following year.

      October 2010

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