37% of IAs checked do not have internal documents formalizing AML/CFT procedures

In Morocco, money laundering and terrorist financing activities can continue in the absence of application by certain insurance companies and insurance intermediaries of the many measures taken by the authorities to remedy this scourge, indicates a report by the Insurance and Social Welfare Supervisory Authority (ACAPS).

In a report this September titled “ Mechanism for the fight against money laundering and the financing of terrorism AML / CFT »the Insurance and Social Security Supervisory Authority (ACAPS) has delivered its control report carried out at the level of EAR (insurance and reinsurance companies) and IA (insurance intermediaries) from Q1 2021 to Q1 2022.

In detail, 5 control missions were carried out on the spot at the level of the EARs, against 16 at the level of the IAs over the same period mentioned above, while 23 questionnaires were sent to the ERAs against 26 at the IAs. In addition, 2 monitoring interviews were carried out at the level of 2 EARs, against 5 IAs.

Among the main points that emerged from the control of the EARs, the ACAPS reveals in its report that 2 EARs among the 5 controlled do not yet have a filtering tool, while 2 EARs among the 5 controlled do not have sufficient human resources and an efficient organization for the accomplishment of the various AML/CFT compliance missions.

In addition, no risk classification automation tools are in place or in the process of being put in place for the 5 audited EARs, the report pointed out, noting that 2 EARs did not have risk classification procedures in place. operational exchange with their partner banks and do not have a real exchange of data with said banks.

After this finding, actions were taken vis-à-vis the controlled companies, says ACAPS. It is a project of sanctions with regard to 2 EAR as well as a post-mission follow-up with regard to the 3 other EAR.

Following this mission, and to remedy these results, ACAPS made recommendations to the EAR which consist in granting more human resources dedicated to AML/CFT compliance while involving the internal audit structure as a 3rd line. to ensure the assessment and implementation of AML/CFT procedures.

ACAPS also recommended that these EARs set up a risk classification automation tool, making it possible to classify the EAR’s customer portfolio in real time, update data relating to existing customers, raise awareness among operational as to the need to collect identification and know-your-customer information and finally speed up the automation of filtering projects in relation to the sanctions and PPE lists.

The EAR and IA always at the “ dragged “

In the pane ” Existence and organization of the device » of the report, it emerges that 37% of the IAs checked do not have internal documents formalizing the AML/CFT (Fight against money laundering/Funding of terrorism) procedures, while the majority of the IAs checked declare that they were not aware the publication of the Authority’s circular no. AS/02/19 relating to the duty of vigilance.

But not only ! 80% of controlled IAs do not have an AML/CFT risk classification model against 12% of controlled IAs that have a risk classification model, but not applied to business relationships, the report states.

With regard to the monitoring of operations, ACAPS pointed out that the system for monitoring operations is dependent on the existence of AML/CFT procedures and an operational risk classification. However, the majority of controlled intermediaries do not meet these two criteria, she underlined.

As for the suspicious reporting system, ACAPSA reveals in its report that 87% of the IAs checked do not have access to the platform. UTRFNET while none of the controlled AIs performed a DS.

In this sense, ACAPS has taken action vis-à-vis controlled intermediaries. These are sanctions against 6 IAs, while post-mission follow-up actions were taken against 10 IAs.

After carrying out this control mission at the level of IA and EAR, ACAPS made several recommendations which consist in formalizing the procedures governing the AML / CFT system within the firm and distributing them to all staff, ensuring that their application, as well as defining the roles and responsibilities of employees in terms of vigilance and internal monitoring.

For agents, ACAPS recommends that they approach the mandating EAR for the implementation of AML / CFT procedures while for small firms, the Authority recommended that they consider the possibility of combining governance and implementation of the AML/CFT system and its monitoring.

In addition, ACAPS proposed to appoint an ANRF correspondent and subscribe to the ANRFNET platform (formerly UTRFNET) relating to the reporting of suspicions and not to draw the attention of customers who present suspicions of AML / CFT or inform them of the suspicious transaction report.

Ultimately, the Autorité recommended ensuring the reliable and exhaustive collection of identification and knowledge information relating to customers, using a risk-based approach, and organizing training and awareness sessions for employees for the raise awareness of their vigilance and internal monitoring obligations.

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