Assess the person for the role
Personnel due diligence means assessing a person’s skills, knowledge, expertise and integrity for relevant AML/CTF responsibilities.
The Australian requirements cover relevant employees and other people engaged by the reporting entity. They are not limited to the AML compliance officer.
Customer due diligence examines the customer. Personnel due diligence examines people who perform relevant work for the business.
Sources: Australian Government, Federal Register of Legislation: 26F(2) and 26F(4)(d); Australian Government, Federal Register of Legislation: 5-8.
Before and during engagement
For services provided through an Australian permanent establishment, AML/CTF policies must provide for personnel due diligence.
The policies must require assessment before and during employment or engagement. The assessment covers integrity and the skills, knowledge and expertise relevant to AML responsibilities.
The Act requires policies appropriate to the nature, size and complexity of the business. A role’s responsibilities help determine suitable assessment measures.
Sources: Australian Government, Federal Register of Legislation: 26F(1), (2) and (4)(d); Australian Government, Federal Register of Legislation: 5-8.
- Role
Identify the person’s relevant AML/CTF responsibilities.
- Ability
Assess the relevant skills, knowledge and expertise.
- Integrity
Assess integrity before and during employment or engagement.
Assess ability and integrity for the role
The assessment concerns relevant personnel, not only the compliance officer. Apply the Australian-establishment condition and select suitable measures.
Separate evidence questions. An answer to one does not settle the others.
Select relevant measures
Rule 5-8 specifies the matters to assess. It does not prescribe a criminal record check for every worker.
A business should select evidence relevant to the role and its risks. A reference, work example or qualification may answer different questions.
These examples do not authorise access to private information. Consider the applicable privacy and employment requirements before collecting personnel information.
Sources: Australian Government, Federal Register of Legislation: 5-8; Australian Government, Federal Register of Legislation: 26F(1).
Example: a new customer review role
In a fictional practice, an employee starts to review customer ownership evidence. The manager examines the employee’s relevant experience and uses a sample case.
The employee misses an ownership link. The manager assigns training and supervised work before allowing independent reviews.
The practice records the assessment and reviews the employee’s work after training. This example addresses ability; a separate assessment must also address integrity.
Source: Australian Government, Federal Register of Legislation: 5-8 and 5-9.