Recent money laundering scandals point to the need for a more comprehensive and effective EU approach to preventing and combating money laundering and terrorist financing. This initiative sets out the areas the Commission intends to address in new proposals.
See the roadmap here .
Read ECIIA’s feedback below.
« Internal Audit plays a very important role in helping to improve tools, procedures and processes in the fight against money laundering, terrorist financing and any misuse of the financial system. It should be made clear that the governance framework of the organisations is important. Internal Audit can help to reduce and mitigate the risks associated with money laundering and terrorist financing.
These risks are, in part, exemplified by the lack of harmonisation and inadequate application of the rules, as well as an inadequate supervision of activities. We encourage harmonisation within the regulation to create consistency and better performance, thus leading to a reduction in the number of money laundering and terrorist financing activities. Despite it being impossible to detect all economic crime in the face of determined criminals, it is crucial for internal audit to provide an integrated and responsive framework of countermeasures and independent assurance to help build trust in the ability of businesses to manage the risks to society posed by digital economic crime.
The effectiveness of these frameworks and mechanisms relies on the effective use of technology, as well as human intervention, thus, it is important to put a large effort into training. The challenge, therefore, lies in the skills gap as well as the technology gap.
This means that it will be crucial for internal audit to help professionals develop the ability to use new tools to better assess their fraud countermeasures as well as maximising the impact of their work. Clear and effective communication of the outputs of their assurance work will assist those who are responsible for the fraud detection to develop better systems, and those who are responsible for the development of regulation to implement frameworks and obligations that are reflective of the capabilities of new technology.
In order to mitigate the risks and to reduce the number of money laundering and terrorism financing activities, it is key to focus on the organisation culture. Employees and managers need to pay more attention and implement this careful behaviour in regard to financial crime into their business strategies and organisational culture. It is, therefore, crucial for internal audit to audit culture and to monitor the implementation of these countermeasures into the organisational culture of businesses. »