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Who needs an anti-money laundering officer?

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Advokatfirmaet Hjort DA, we find solutions in the details.
Both individuals and companies risk severe penalties if they contribute to money laundering, even if the contribution is the result of negligence. By appointing an anti-money laundering officer organisations will reduce their risk, protect their reputation and comply with the law.

Under Norwegian law, certain types of businesses are required to appoint an anti-money laundering officer. The anti-money laundering officer is responsible for measures to combat money laundering within the organisation. It may also be advisable to appoint an anti-money laundering officer in companies that are not obliged to do so under the law. 

What is money laundering?

Money laundering is defined as any action that contributes to securing the proceeds of criminal activity by concealing the source of illicit income or assets, where they are sent, or who has control over them. In order for criminals to be able to enjoy the benefits of the proceeds of crime without arousing suspicion, the money in question must be (re)integrated into the legitimate economy. Money laundering can either be carried out on behalf of others, or to access the profit from one’s own criminal acts (known as self-laundering). It is not uncommon for money laundering to take place with the help of (otherwise) law-abiding friends, family or business associates. 

Money laundering occurs in connection with a number of different profit-motivated crimes, including drug trafficking, robbery, embezzlement, blackmail, fraud, tax evasion, creditor fraud, insider trading and corruption. A person may be held legally responsible for money laundering even if they did not have knowledge regarding the crime the proceeds originated from, if the person understood (or should reasonably have understood) that these proceeds originated from a criminal offence of some kind. 

Money laundering increases the profitability of profit-motivated crime, and makes it harder to detect. This crime-driving effect is reflected in the high penalties that can apply. In Norway, money laundering can be punished by imprisonment for up to 15 years, regardless of whether the guilty person has, themselves, profited from the act. 

What is an anti-money laundering officer?

The Norwegian Money Laundering Act requires some organisations to appoint an anti-money laundering officer. The anti-money laundering officer is the person in the organisation who is responsible for implementing and managing anti-money laundering measures, relating to the voluntary or involuntary involvement of the organisation in money laundering. While the law does not specifically set out all the responsibilities of the role, they include ensuring that the company’s activities are monitored, that suspicious transactions are identified and otherwise ensuring compliance with laws and regulations related to money laundering. The anti-money laundering officer can also act as a link between the company and relevant authorities in handling money laundering cases.  

The Norwegian Financial Supervisory Authority has prepared a guide which, among other things, sets out some minimum requirements for the role of anti-money laundering officer: 

The minimum requirements are that the anti-money laundering officer is a manager with sufficient knowledge of money laundering regulations, as well as the company’s exposure to the risk of money laundering and terrorist financing. The anti-money laundering officer must also have sufficient experience, competence and authority to make decisions related to the company’s anti-money laundering and terrorist financing measures. The anti-money laundering officer must have a direct reporting line to the board and top management, so that they can report directly where this is necessary. 

The duties of the anti-money laundering officer

An anti-money laundering officer can have several important tasks in ensuring that an organisation effectively prevents money laundering. These tasks include: 

  • Developing guidelines and procedures to identify suspicious transactions, carrying out necessary checks and reporting these transactions to the relevant authorities. 
  • Monitoring the company’s transactions and identifying potentially suspicious activities that may be indicative of money laundering. This includes, among other things, analysing patterns, transaction volumes and customer behaviour to uncover unusual activity. 
  • Ensuring that company employees have adequate training and awareness of money laundering risks, and are familiar with the procedures in place for dealing with suspicious transactions. This may include, for example, holding courses, publishing guidelines and updating relevant staff on changes to money laundering legislation. 
  • Acting as a link between the company and the authorities in handling money laundering cases. This involves reporting suspicious transactions, cooperating with investigators and authorities where necessary, and ensuring that the company complies with any investigations or requests from the authorities. 

What are the benefits of having an anti-money laundering officer?

  • Compliance with laws and regulations: An anti-money laundering officer will ensure that your organisation complies with its legal obligations when it comes to money laundering. By ensuring proper compliance, you can avoid costly fines and other severe legal consequences. 
  • Protecting reputation: Being associated with money laundering cases can be devastating for a company’s reputation, eroding the trust of customers, partners and investors. An anti-money laundering officer will help your organisation maintain its reputation as a serious and reliable player by implementing effective control systems, and by ensuring that it operates in an ethical and legal manner. 
  • Prevention of financial loss: Money laundering can cause financial losses for an organisation, either directly, through involvement in criminal activity, or indirectly, through fines and penalties. An anti-money laundering officer will help reduce the risk of such losses by identifying and reporting suspicious activity in a timely manner. 

Which companies need a money laundering officer?

Under the Norwegian Money Laundering Act, most companies operating in banking, finance, fund management or property sales, among others, must have an anti-money laundering officer.  

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