In addition to our on-site inspection and desk-based review programmes, we also adopt a thematic approach to supervision.
We carry out thematic reviews to better understand how supervised firms are implementing a particular aspect of their AML obligations, for example we might focus on risk assessments, staff training or suspicious activity reporting. Thematic reviews may also be used to assess in more detail a current or emerging risk or trend within the legal sector, or to obtain a more in-depth analysis of a higher risk practice area or client type across different firms.
By focusing on specific risks or concerns, we can increase our knowledge of the effectiveness of firms’ AML compliance, improve our understanding of the ML/TF/PF threats and vulnerabilities within our supervised population, and help gather information to inform our overall regulatory approach. This in turn enables us to tailor our guidance and outreach accordingly and make clear our expectations.
Thematic Review of Business Risk Assessments (“BRA”)
Under AML Regulations 8(1) and 8(2), supervised firms and sole practitioners are required to carry out and maintain a documented BRA to identify, assess and understand the inherent risk of money laundering, terrorism financing and proliferation financing to which the business is exposed. The BRA is the foundation of an AML compliance framework and drives a risk-based approach. CARA commenced its review of firms’ BRAs in 2021 and issued the report of findings in August 2022.
You can find the report of our findings from the BRA thematic review here.