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Challenges in implementing the ‘Fifth Pillar’
Journal of Financial Compliance,
1
(3),
267-275
(2017)
Abstract
Since the Financial Crimes Enforcement Network (FinCEN) published the customer due diligence (CDD) ‘Fifth Pillar’ rule on 11th May, 2016, there have been a number of articles that have summarised the primary requirements and some have even listed key interpretive challenges and issues. There are many nuances with both design and implementation that are easy to overlook, however. This paper, written from the perspective of the person responsible for writing the business requirements and supporting processes, outlines several key interpretation issues and design/implementation challenges; it also highlights new governance standards and processes that should be constructed to identify ‘triggering events’ and ensure proper due diligence following such an event. At a minimum, this paper may serve as a high-level checklist to help ensure that a covered institution has identified and addressed the key issues driven by the new CDD rule well in advance of the 11th May, 2018 deadline.
Keywords: customer due diligence; Fifth Pillar; anti-money laundering challenges; beneficial owner rule; CDD exemptions
The full article is available to subscribers to the journal.
Author's Biography
Robert Molloy joined Raymond James in 2015 and is the Chief Anti-Money Laundering Officer with responsibility for overseeing its enterprise Financial Crimes Management Program, which includes anti-money laundering (AML), counterterrorism financing, sanctions, higher-risk securities management, fraud management and anti-bribery/anti-corruption. Bob is a certified anti-money laundering specialist and has 31 years of progressive experience in reviewing and remediating regulatory compliance programmes for banks, brokerages and insurance companies, as well as designing enterprise programmes and solutions to enable, monitor and enforce regulatory compliance. Prior to joining Raymond James in 2015, Bob spent 13 years assisting major financial institutions in evaluating, designing and implementing all phases of their AML and financial crimes programmes as a senior manager with Deloitte, an Associate Partner with IBM and, most recently, an Executive Director with Ernst & Young.
