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Increased regulatory focus on anti-money laundering non-compliance – is your investment fund prepared?

16 March 2023
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Regulators globally are placing increased focus on the identification of anti-money laundering (“AML”) control deficiencies and Know Your Customer non-compliance. This places even more scrutiny on the AML officers who are charged with ensuring that an AML framework is robust and at all times compliant with jurisdictional AML regimes.

In the alternative investment funds space, operators and governing bodies will typically outsource their AML obligations and therefore it is incumbent upon them to ensure that their choice of AML officer stands up to regulatory scrutiny. Making the wrong choice could lead to financial penalties, regulatory sanctions and immeasurable reputational risk. 

Despite these risks, there are times when the choice of AML officer can be a relatively low priority for some, with the appointments being viewed more as a ‘tick box’ exercise than a valuable regulatory risk mitigation function. With regulators also focusing on the roles of investment fund governing bodies, there are some initial questions that should be asked before moving forward and ratifying the appointment of their AML officers;

  • How qualified are the AML Officers?
  • How experienced are they?
  • How familiar are they with the jurisdiction’s AML legislation? Is it their primary legislation?
  • Have they managed a suspicious activity reporting process before?
  • Have they managed a sanction reporting process before?
  • What is their portfolio size – do they have the capacity to discharge their obligations?
  • Do the AML officers hold any other roles within an organisation?
  • Are the AML officers the main point of contact, or will communication be routed through junior members of a broader team?
  • How familiar are the AML Officers with fund administrator AML controls? Are they able to undertake face to face due diligence visits? Will they be available to assist the administrator with investor due diligence issues in a timely manner?
  • How familiar are the AML officers with the regulatory on-site inspection process?
  • How often will the AML Compliance Officer provide written reports and will the reports be presented at periodic investment fund board meetings?
  • Will the AML officers assist with ongoing AML training for boards of directors and fund operators?

Centralis Governance Risk and Compliance (“Centralis GRC”)

The professionals within the Centralis GRC AML team are best-in-class AML officers who are carefully selected through a rigorous hiring process. They are individuals with decades of experience acting in the AML officer roles for investment funds and, as such, have extensive knowledge of all related AML legislation, including AML regulations; regulatory guidance; practical experience managing the regulatory onsite AML process and, industry best practice.

The Centralis GRC AML team will ensure that appropriate money laundering, terrorist financing, proliferation financing and sanctions risk mitigation controls are implemented, with ongoing reporting to investment fund operators and boards undertaken as a matter of course.

Our AML officers have excellent working relationships with legal firms, fund administrators and independent directors which enables the provision of the AML services to be undertaken in an independent, transparent and cost-effective way.


It is vital that the AML officers are accessible and able to assist with any AML related issue in a timely manner. Global sanctions restrictions, suspicious activity reporting obligations, and investor due diligence can be ongoing challenges for investment funds; it is key that the AML Compliance Officer is on hand to deal with them. This not only mitigates risk, but is also cost effective, as it alleviates the need for funds to seek legal advice in order to deal with them (certainly initially). For the seasoned AML professional, these areas are a standard part of their role.

The Centralis GRC AML officers are the principle point of contact for investment funds and are always on hand to deal with AML issues should they arise. Centralis GRC places great importance on genuine continuity of care and a high-quality, reliable service.  An on-the-ground presence with AML officers based in Europe and the Cayman Islands ensures almost 24-hour cover, with the ability to assist quickly and effectively.

Looking ahead

The AML landscape is constantly changing, with evolving legislation placing greater importance on the role of the AML officer. Partnering with the informed, efficient and experienced Centralis GRC AML team will provide investment funds with the expertise and knowledge to navigate these changing waters successfully.

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