Looking for an answer to how to set up an Internal control system (ICS) for the implementation of the AML/CFT Law on your own? Read the answer in our new blog post. But before answering the question “how?”, let’s first try to answer the questions “why do you need to set up an ICS in the first place?” and “what is an ICS?
“Why?” is a question of goals. It is a question of what we want to achieve as a result of applying this or that action or technique. It is one of the key questions in choosing “how?” methods.
– Why am I doing this?
– What result do I want to achieve?
– What will be the outcome of this process and why do I need this outcome?
The answer seems to be “because I don’t want to be punished”. In this case, it would be a negative motivation. The positive motivation would be to reduce the risk of being involved in laundering schemes and losing one’s reputation, causing irreparable damage to the company.
“What?” is the question of the set of means and tools that can be used to achieve the desired result. Depending on what the answer to “Why?” is, we are looking for the answer to “What?”.
– What exactly do I need to do to get the results I want?
– What techniques can I use to achieve this?
– What methods and tools to use to achieve the desired result?
– What else can I do to achieve the intended result?
To help us answer this question, the SRS points out that the subjects of the AML/CFT Law are expected to have at least the following procedures in their internal control system for compliance with the AML/CFT Law (see also Article 7(1) of the AML/CFT Law):
– assessing your risks
– procedures for client identification, due diligence, risk assessment and transaction monitoring;
– procedures for detecting and reporting suspicious transactions to the Financial Intelligence Service;
– procedures for the storage and destruction of information;
– the rights, responsibilities and standards of professional competence and compliance of staff
– procedures for reassessing internal control system procedures.
When do we know “why?” and “what?” we need to do, we can move on to “How?” do it. If there is no desire to use experts, for example if the cost of a tailor-made ICS is too high, the ICS can be developed independently. Here are some of our tips:
1.Find samples of the above procedures online (free or for a small fee) and use them, rewritten to suit your company;
2.Ask the representatives of the SRS to give you recommendations for setting up an ICS according to your sector of economic activity (there are also various materials on this topic on the SRS website) and write your procedures on this basis.
3.Use the automated tool that creates the ICS based on your answers to the questionnaire for creating the ICS (without using experts).
If you’re struggling and don’t know where to start, try the Compliant Automated ICS Tool or book a free consultation with one of our experts.
AML.Plus team
English 
Latvian