If you were thinking that reading AML guidance was enough to satisfy the requirement to have training, think again.
Continuing to trade at the level of 10,000+ Euros as an Art Market Participant business carries serious responsibility in the modern marketplace.
Of great importance is the notion that attaining training is not about the business, but ‘relevant employees’ (noting that this applies to employees and contractors alike). Therefore, it’s possible that individuals who work for several AMP businesses will take AML Training once, with the corresponding Certificate of Completion covering their AML Training need for multiple businesses.
If a beneficial owner, officer or manager (as defined in BAMF Guidance) has not received AML training, HMRC might contact the business to clarify. Moreover, this is subject to being questioned in the process of an intervention by the Regulator. In such situations, you might need to explain why the business has determined that such an individual is not a ‘relevant employee’ and where this decision has been documented. If the business has not identified an employee who HMRC later believes is relevant, the business will have to deal with the consequences of that, particularly if it has been done in an attempt to evade MLR obligations.
AML Training vs. ArtAML™ Onboarding
This is an important distinction: “AML Training” is separate to ArtAML™ (or any other) platform onboarding. Learning how to use a technology solution to help with your AML needs will not satisfy authorities in the case of an audit.
Now then, here’s what Regulation 24 from the Money Laundering Regulations (2017) says about ‘relevant employees’ (those who need training):
Regulation 24:
(2) For the purposes of paragraph (1), a relevant employee is an employee whose work is—
(a) relevant to the relevant person’s compliance with any requirement in these Regulations, or
(b) otherwise capable of contributing to the—
(i) identification or mitigation of the risk of money laundering and terrorist financing to which the relevant person’s business is subject; or
(ii) prevention or detection of money laundering and terrorist financing in relation to the relevant person’s business.
Source: https://www.legislation.gov.uk/uksi/2019/1511/introduction/made
An instructive article on gov.uk states:
“You must make sure any employees are aware of the laws covering money laundering. In particular, employees who deal with customers – including receptionists and anyone who answers the telephone – should receive regular training to make sure your business complies with the regulations.
“You should train employees on how to recognise suspicious transactions and what to do if they identify them. They should understand how your anti money laundering policies and procedures affect them. You must have your anti money laundering policies, controls and procedures written down and available to all of your staff.”
Source: https://www.gov.uk/guidance/money-laundering-regulations-nominated-officers-and-employee-training
Not planning to have the Founder, Directors or other Senior Management undertake AML Training?
If the regulator comes knocking on your door, they will expect to see that those in the business who have ultimate responsibility and/or manage team members with AML operational duties are serious about understanding and overseeing the business’s obligations. The business culture led from the top will not only inform but reflect how compliance is handled throughout the business.
All Owners and/or Directors, in addition to Managers involved with AML Operations or overseeing those with AML Operations, will be expected to have AML Training congruent with their responsibilities. Options include courses that provide certification – some with ‘risk manager’ level such as that offered by ArtAML, and internal training, for which retention of records is paramount.
What won’t be acceptable to the Regulator when it comes to Owners, Directors, Senior Management and AML Training
❌ Not getting involved with AML
The BAMF Guidance (clause 2.7) states the following (source: MLRs 19(4)(d), MLRs 21(5), POCA s 331):
Actions required, to be kept under regular review
- Senior management to ensure the nominated officer has:
- active support of senior management
- adequate resources
- independence of action
- access to information
- Nominated officer to monitor the effectiveness of systems and controls
❌ Having a team member take an AML Training course on your behalf
The key here is that individuals with responsibility to have up-to-date knowledge, enabling them to have in place an effective compliance program.
❌ Not taking training because you’ve been involved with AML in another or previous career
The requirements and risks for AML in the art market vary from other sectors. While such previous experience might help your understanding on the subject, it won’t all be fit for purpose. This is not to mention that compliance obligations are regularly updated, and it is your responsibility to have training at regular intervals to stay in the know – and compliant.
Here’s what the BAMF Guidance (2020) states as being required for AML Training:
Part I: Overview
42. Delivery of staff training should be carried out in a clear and effective way, and repeated sufficiently often, including when new employees join the firm, when roles change, or when regulations, policies or procedures change. Training may be provided by internal or external compliance experts in many formats, including face-to-face, on-line or via seminars and conferences.
44. AMPs should maintain records of training and may be asked to produce evidence of training to HMRC.“
Part II: Guidelines
4.10 The content of any training, the frequency of training and the assessment of competence following training are matters for each AMP to assess and decide in light of the money laundering and terrorist financing risks they identify, provided the requirements of Regulation 24 are met. HMRC will expect such issues to be covered in each AMP’s policies and procedures.
4.11 For example, policies and procedures should make provision for the attainment of an appropriate competence level by the relevant employees identified in paragraph 3.9, prior to them undertaking the duties for which they will be responsible. This may, for example, be achieved by the attainment of an appropriate pass rate in a competency test following training.
4.15 Ongoing training must be given to all relevant employees at appropriate intervals. Records should be maintained to monitor who has been trained, when they received the training, the nature of the training and the effectiveness of the training.
7.19 An AMP’s records should include:(a) in relation to training:
- dates AML training was given;
- the nature of the training;
- the names of the staff who received training; and
- the results of the tests undertaken by staff, where appropriate.
Following on from the last point above, there are different record-keeping requirements (relating to the AML Training program) between small and large AMP businesses
The BAMF Guidance (clause 4.1) states the following (source: MLRs 24(1) ):
All AMPs must:
- maintain a written record of what has been done to raise awareness and the training given to staff
- ensure that a relevant director or senior manager has overall responsibility for establishing and maintaining effective training arrangements.
Larger and more complex AMPs must:
- screen relevant staff before they take up post and during the course of the appointment assess their skill, knowledge and expertise to ensure that they are effective in carrying out their function and are of good conduct and integrity.
How can you get AML training specific to the needs of the art market while passing a test (as above) and receive paperwork?
We have you covered. ArtAML’s training program is specifically geared to the art market and includes a comprehension test in addition to a digital certificate (providing that you pass the course). As the best practice for frequency established across regulated sectors is once a year, the ArtAML™ Certificate of Completion is valid for one year.
Find out more about our AML Training program, and get started right now. Once purchased, it will take about 2 hours, and you can pause, re-start, etc.
Before you go… be sure that internal training (separate to the ArtAML course) relates specifically to your business’s AML Policy
It’s important that you and any other ‘relevant employees’ (including independent contractors involved with AML in transactions) are aware of how the business addresses identified risks, outlined in your ‘Policies, Controls and Procedures’ (PCPs) as contained within your business’s AML Policy. Anytime that a risk changes, a review is to be taken of the AML Policy, with a view to updating mitigations if needed (for example, if a new risk doesn’t have any procedure to address the risk in real-life transactions).
Therefore, internal training keeps relevant employees up-to-date with the business’s specific needs, while certified AML Training provides the thinking behind AML to support your overall compliance (for instance, learning how to take a risk-based approach and understanding how art businesses are specifically at risk of being the target of money laundering or terrorist financing activities).
Further reading:
Risk assessment and AML Policy: A legal requirement for Art Market Participants