Implementation of AML/CFT system in BPO

We advised a BPO service provider in a large group of companies on the following project:

IMPLEMENTATION OF AML/CFT SYSTEM AT BPO SERVICE PROVIDER

• Business Process Outsourcing (BPO) consists of entrusting an external provider (insourcer) with the execution of a part (non-critical) of business activity of an entrepreneur, most often including such areas as accounting, payroll, or funds management.
• A specific type of outsourcing is the organization of the so-called shared service centers (SSC), in which the outsourced tasks are performed by the selected group entity for the benefit of other entities belonging to the same group.
• The provision of outsourcing services, whether as part of the BPO or SSC model, is often associated with the emergence of obligations under anti-money laundering and counter-terrorist financing (AML/CFT) regulations. Furthermore, the mere fact of providing BPO services to a limited number of clients (e.g. entities belonging to the same group as the insourcer) does not exclude the insourcer’s qualification as an obliged institution under AML/CFT, which entails the obligation to implement an internal AML/CFT procedure, prepare ML/FT risk assessment and apply financial security measures with respect to clients.

The advisory services of DLK Legal included:

1. legal analysis to determine whether specific BPO services provided by the Principal are covered by the AML/CFT regime
2. preparation of an internal AML/CFT procedure for a BPO service provider
3. preparation of draft ML/TF risk assessment of the operations of the BPO provider, with detailed risk, vulnerability, inherent and residual risk assessment matrices
4. development of an AML/CFT compliance checklist for use by the personnel of the BPO provider
5. development of specimen KYC and client risk assessment forms
6. development of specimen resolution for the Board to designate senior executives responsible for the AML/CFT area
7. development of templates for reports to the Inspector General of Financial Information and the public prosecutor.

See also on the DLK websites:
AML/CFT package (2021-2023)