🔹 Definition
The Money Laundering Reporting Officer (MLRO) is the designated individual within a regulated entity—such as a financial institution, corporate service provider, or fintech company—who is responsible for overseeing the organization’s anti-money laundering (AML) compliance program and for reporting suspicious activities to the relevant authorities. The MLRO plays a central role in ensuring that the business adheres to legal obligations under AML and CFT regulations.
The MLRO must have sufficient seniority, independence, and authority to carry out their responsibilities effectively and to act as the main contact point for regulators and law enforcement.
🔹 Frequently Asked Questions (FAQs)
Q1: What are the core responsibilities of an MLRO?
- Receiving and evaluating internal reports of suspicious activity (e.g., STRs/SARs)
- Filing Suspicious Transaction Reports (STRs) to local authorities (e.g., FIU, MAS, NCA, FinCEN)
- Ensuring the business has a robust AML/CFT framework, including:
- Customer due diligence (CDD) policies
- Risk assessments
- Staff training
- Record-keeping
- Liaising with regulators, auditors, and law enforcement agencies
- Staying updated on AML laws, FATF recommendations, and industry best practices
Q2: What qualifications or experience does an MLRO need?
- A deep understanding of AML/CFT legislation and enforcement trends
- Experience in compliance, legal, risk management, or financial crime investigation
- Often required to complete specialist AML certifications (e.g., CAMS, ICA)
- Ability to make independent judgments and handle sensitive data confidentially
Q3: When is appointing an MLRO mandatory?
- In most jurisdictions, it is legally required for regulated entities, including:
- Banks and financial institutions
- Payment providers and e-money firms
- Crypto exchanges
- Trust and company service providers (TCSPs / CSPs)
- Casinos, law firms, and high-value dealers
- The MLRO must be approved or registered with the relevant financial or supervisory authority in some countries
Q4: Can the MLRO be held personally liable?
Yes. In several jurisdictions, MLROs can face regulatory penalties, disqualification, or even criminal charges if they fail to fulfill their duties properly, especially in cases of:
- Negligence in filing STRs
- Failure to respond to red flags
- Lack of oversight over compliance systems
This underscores the importance of documented procedures and continuous training.
Q5: How does the MLRO differ from a compliance officer?
- The Compliance Officer may handle broader areas such as regulatory, conduct, data, and operational compliance
- The MLRO focuses specifically on financial crime risk, particularly money laundering and terrorist financing
- In smaller firms, both roles may be held by the same person, but MLRO responsibilities must still be clearly defined and resourced
