4.10. Managing Employee Risk

Effective from 11/11/2021

As per Paragraphs 8.2 and 16.22 of the Standards, the LEH must implement an appropriate recruitment and Know Your Employee (“KYE”) process for hiring employees and confirm the background of applicants prior to placing them in employment. The level of vetting procedures applied should reflect the ML/FT risks to which individual employees are exposed in their assigned roles. The LEH should be aware of potential conflicts of interest for employees with AML/CFT responsibilities and should act to reduce or manage such conflicts of interest.

Furthermore, under Paragraph 16.28 of the Standards, the LEH must watch out for its employee’s behavior and be aware of possible indicators of illicit behavior displayed by employees, such as:

	•	An employee whose lifestyle cannot be supported by his/her salary, which may indicate receipt of tips or bribes.
	•	An employee who is reluctant to take a vacation, which may indicate they have consented or are being forced to provide services to customers in violation of the law or company policy.
	•	An employee who is associated with an unusually large number of transactions or a transaction in an unusually large amount, which may indicate they have consented or are being forced to provide services to customers in violation of the law or company policy.