Money Laundering Reporting Officer (MLRO)

A Money Laundering Reporting Officer is responsible for handling information linked to money laundering and other financial crimes. Their goal is to manage and assess this data, reporting suspicious activity to appropriate authorities, such as the UK’s National Crime Agency.

MLROs also perform other tasks. For example, they:

• Develop new AML policies and procedures.

• Conduct customer due diligence (CDD) and KYC checks.
• Review internal policies (to keep them up-to-date) and maintain professional relationships to ensure money laundering and other types of fraud are detected and reported within the required time frame.
• Manage record-keeping while filing internal/external AML reports.

There aren’t any specific regulatory requirements for who can work as an MLRO in a company. However, given the scope of this position and other factors, such as working with sensitive data, a successful Money Laundering Reporting Officer should be honest and transparent and also be dedicated to AML compliance (preferably from a legal background). This is important because this person must be capable of managing their responsibilities and ensuring a high standard of AML compliance within the organization.

All regulated industries that are at risk of money laundering activities need to have a dedicated MLRO to help them build an AML program and maintain compliance with regulatory requirements. Examples of sectors that need to have an MLRO include real estate and letting agents, solicitors, credit companies, tax specialists, or accountants. In general, this applies to financial institutions and all other regulated entities that are considered to be high-risk due to factors like being a cash-intensive business or selling high-value items, which are often used as money laundering tools. 

One of the responsibilities of a Money Laundering Reporting Officer is to provide staff training on AML compliance rules and procedures, as well as ongoing updates that show new risks that need to be addressed. MLROs need to maintain close communication with the company’s management team and key stakeholders if any potential AML risks arise. In case the company is exposed to money laundering, MLROs provide strategies on how to mitigate such risks. 

One of the responsibilities of an MLRO is to continuously assess money laundering risks within the organization. So, to conduct ongoing monitoring and keep up-to-date customer risk profiles, MLROs must know key AML processes and methods required for due diligence and ongoing monitoring. They should be familiar with common types of behaviors linked to individuals at risk of involvement in money laundering activities. For example, MLROs must have a strong understanding of financial crime methodologies and the ability to identify politically exposed persons (PEPs) or sanctioned entities. 

A Money Laundering Reporting Officer is responsible for maintaining the integrity of the firm in terms of keeping it compliant with AML requirements. They have many day-to-day tasks regarding AML policies and must periodically ensure compliance and effectiveness of the outlined strategies. This is considered to be a complex task due to the quickly changing nature of AML risks and regulations. So, in some cases, MLROs may occasionally delegate some of their responsibilities to other dedicated compliance specialists to help manage their workload.