ECSH45812 - Fit and proper and approvals: Contents: Operational Guidance: Fit and proper what is tested? Competence and capability
When determining whether a business and all of its beneficial owners, officers, or managers (BOOMs) have adequate experience in accordance with Regulation 58(4)(c) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ( MLR 2017), the decision maker (DM) should consider factors relating to competence and capability.
If the DM is satisfied that a business or its BOOMs do not have adequate skills and experience, this may also lead to the determination that the business is at risk of being used for money laundering or terrorist financing which would constitute a failure under Regulation 58(4)(b) of MLR 2017 as well.
Below is a non-exhaustive list of factors that may indicate that a business or its BOOMs do not have adequate skills and experience. The DM should also consider any additional factors that demonstrate a lack competence and capability.
(1) Whether the person satisfies the relevant training and competence requirements in relation to the role the person performs or is intended to perform.
(2) Whether the person has demonstrated by
experience and training that the person is suitable, or will be suitable if
approved, to perform the role.
(3) Whether the person has adequate time and other
resources of any kind available to them in order to
perform the role and meet the responsibilities associated with that role.
(4) Whether the person has demonstrated compliance with their obligations under the money laundering regulations and other relevant legislation. Consistent failure to comply with the requirements of:
- the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
- the Money Laundering Regulations 2001
- the Money Laundering Regulations 2003 or,
- the Money Laundering Regulations 2007
Would also constitute a failure under Regulation 58(4)(a).
A person may have been convicted of or dismissed or suspended from employment for drug or alcohol abuse or other abusive acts. This will be considered only in relation to a person’s continuing ability to perform the particular role for which the person is or is to be employed.
The relevant training requirements are that the person ensures that they are:
- made and remains aware of the law and relevant guidance relating to money laundering; and
- that they regularly receive training in how to recognise and deal with transactions and other activities which may be related to money laundering.