The Basel Committee on Banking Supervision’s Guidelines on Sound management of risks related to money laundering and financing of terrorism describes “how banks should include money laundering (ML) and financing of terrorism (FT) risks within their overall risk management” and gives important insights into what corporates will experience in AML control from their banks:

• BIS define the problem as Money Laundering and Financing of Terrorism (ML/FT)
• assessment, understanding, management and mitigation of risks: report picks out three lines of defence:
  • “policies and procedures should be clearly specified in writing, and communicated to all personnel”
  • “the chief officer in charge of AML/CFT should have the responsibility for ongoing monitoring of the fulfilment of all AML/CFT duties by the bank“
  • internal audit (in many countries, external auditors also have an important role to play)
• adequate transaction monitoring system: there is particular emphasis on the international banks and what is required to successfully prevent ML and FT
• customer acceptance policy: “When assessing risk, a bank should consider the factors relevant to the situation, such as a customer’s background, occupation (including a public or high-profile position), source of income and wealth, country of origin and residence (when different), products used, nature and purpose of accounts, linked accounts, business activities and other customer-oriented risk indicators in determining what is the level of overall risk and the appropriate measures to be applied to manage those risks.”
• ongoing monitoring: “Ongoing monitoring should be conducted in relation to all business relationships and transactions, but the extent of the monitoring should be based on risk as identified in the bank risk assessment and its CDD efforts. Enhanced monitoring should be adopted for higher-risk customers or transactions. A bank should not only monitor its customers and their transactions, but should also carry out cross-sectional product/service monitoring in order to identify and mitigate emerging risk patterns.” 

There is great detail on how to manage ML/CFT group-wide and cross-border context, and the role of supervisors.

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CTMfile take: If you want to understand how your bank is being supervised on AML (ML/FT) download the report, here.