The Anti-Financial Crime Committee plays a pivotal role in implementing robust anti-financial crime strategies, fostering a culture of compliance throughout the organization, and equipping all employees with the necessary training to understand and mitigate potential financial crime risks.

Anti-Financial Crime Committee Roles and Responsibilities

The entities establish an anti-financial crime committee or AFCC led by the CEO and may include important key executives such as the head of risk, head of operations, head of credit, head of legal, head of HR, head of IT, etc. 

The compliance officer serves as a secretary to AFCC. The committee meets at a set frequency per compliance program to discuss financial crime risks, issues, and incidents that occurred during the period. 

The AFCC ensures that the anti-financial crime function can secure assistance from other departments, for example, legal, treasury, credit, or risk management. An important function that AFCC may perform is to help enhance the collaboration between the departments and process owners to minimize the risk of financial crimes. 

The AFCC, in turn, helps the compliance function better understand sources of financial crime risks and devise a targeted anti-financial crime strategy to fill out the gaps. This education from key executives to other department officers helps compliance at the forefront, increases awareness at all hierarchal levels, and makes employees feel the need for risk management.

Besides, at minimum, the terms of references of the central compliance management committee should include the following:

• Oversee the management of entity-wide compliance risks and ensure that management understands the financial crime risks.
• Promote a high anti-financial crime compliance culture and assist compliance function in discharging its roles and duties.
• Facilitate anti-financial crime officers successfully and effectively implementing compliance strategies and programs across different functions.
• Assist and facilitate the compliance officer in implementing anti-financial crime-related policies, processes, and procedures to manage compliance risk; and
• Assist human resources in developing and implementing an organization-wide financial crime prevention training program to ensure that staff maintains a satisfactory level of knowledge of regulations and laws.

Money laundering is the process by which criminals attempt to conceal the true criminal origin and ownership of the proceeds of their criminal activities. It is the process of converting the proceeds of crime into assets that appear to have a legitimate origin. If successful, it allows criminals to keep control of and enjoy the proceeds.

The requirement to launder criminal proceeds through the financial system and other means is critical for the success of criminal operations. Those involved seek to take advantage of the world’s financial institutions in order to profit from the proceeds of their criminal activities.

Final Thoughts

The Anti-Financial Crime Committee (AFCC) serves as a vital line of defense against financial crimes within an organization. It brings together key executives, under the leadership of the CEO, to provide guidance, support, and supervision to various functions like the anti-financial crime function, with an aim to prevent financial crimes. By fostering interdepartmental collaboration and ensuring everyone is apprised of the potential sources of financial crime risks, the AFCC plays a pivotal role in devising comprehensive anti-financial crime strategies and implementing compliance programs.

Furthermore, it reinforces a robust anti-financial crime culture, assists in the effective execution of compliance-related policies, and promotes awareness and training throughout the organization. Its overarching goal is to safeguard the institution from becoming an unwitting accessory to money laundering or other financial crimes, underscoring the importance of vigilance, cooperation, and proactive management in the global fight against such illicit activities.