A small agency wants to make its most junior administrator its AML/CFT compliance officer, reporting to no one in particular. Under s 56 of the AML/CFT Act 2009, what is required?
Correct Answer
D) The compliance officer must be a senior manager or report to a senior manager.
Section 56 requires a reporting entity to have a written AML/CFT programme and to designate an employee as AML/CFT compliance officer to administer and maintain it. Under s 56(4) the officer must be a senior manager or report to a senior manager. An entity with no employees appoints an individual instead.
Why This Is the Correct Answer
Section 56(4) ties the compliance officer role to senior management.
Why the Other Options Are Wrong
Option A: The compliance officer must be an external auditor independent of the agency.
Section 56 requires an employee to be designated; independence is required of the auditor under s 59B, not the compliance officer.
Option B: Any employee may be appointed, because the Act sets no seniority requirement.
Section 56(4) requires the compliance officer to be a senior manager or report to one.
Option C: The compliance officer must be a licensed agent approved in writing by the Authority.
The AML/CFT Act does not require the compliance officer to be a licensee or approved by the Authority.
Background Knowledge for Compliance
Source: https://www.legislation.govt.nz/act/public/2009/0035/latest/whole.html
Exam Tip for Compliance
Compliance officer: an employee, and a senior manager or reporting to one.
Common Mistakes to Avoid on Compliance Questions
- •Thinking the compliance officer must be independent, like the auditor.
More Compliance Questions
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