Congratulations, you have now completed more than 50% of the work in AML/CFT. You have done Money laundering and Terrorism financing risk assessment developed policies and manuals. Now, before you start implementing it, let’s do some housekeeping that is to say manage your reporting structure.

Go to the previous article by clicking here.,if you have just landed on this page for better understanding.

Usually reporting structure for AML/CFT should look like in the figure below to ensure proper AML/CFT governance:

But this structure may be altered as per the organization’s need, however, care should be taken such that reporting structure should be created in such a way that activities or issues regarding AML/CFT  should be reported to management as well board committee so that they can take necessary action.

In some jurisdictions, regulatory bodies require separate BOD level AML Committee to be established so that AML/CFT issues will be given priority than having present in the BOD committee where it gets buried under other agendas.

Now,  let’s talk about the department structure. The creation of department structure is art rather than science. The following principles will guide you on creating a department structure.

In his book, E Myth, Michael E. Gerber explains that there are three types of personality: Entrepreneur, Manager, and Technician. Entrepreneur brings new ideas, innovation. The manager aims to main order in the organization, does planning, develops routine. Finally, a Technician loves to do his/her job. He says that if these personalities are included in a single person, it will create a conflict in such a way that that person will not be able to accomplish any task. This is the reason why many startups fail because the owner tries to involve in every task himself instead of delegating.

You should try to implement this in your department structure. Your department structure should be created in such a way that you as the department head should act as an entrepreneur. You should be able to bring new ideas, innovation to improve upon AML/CFT. It may be anything like meeting with vendors for purchasing new AML/CFT software, identifying new control measures to strengthen your AML/CFT system, doing gap analysis in existing policy, providing training to other employees. If you are always occupied with daily tasks, then you will be not able to focus on these key areas.

The manager role should be delegated to your second line. The manager should be able to monitor the activities of other staff in such a way that, he ensures that every staff performs his/her activity in a timely and accurate manner. He should be able to guide them if they need any help or reprimand them if they perform their job negligently. He should be able to manage departments like clockwork bringing consistent results. The chemistry between entrepreneur and manager should be such that any new ideas that an entrepreneur brings should be implemented by the manager without hitch.

The third role is of technicians who are individual employees who are given a specific task. The task should be divided in such a way that everybody is clear of what is expected of them. This will also create transparency during a performance evaluation since every staff knows what is the benchmark against which their work will be verified. The one way to accomplish this is to design job responsibility in such a way that it will list all the activities to be performed by the staff along with key performance indicators that each staff needs to achieve to successfully complete the task. If they fail to meet any of those KPI, it means staff is not performing, as a result, your department performance is not up to mark. You can then decide whether to train, motivate, or in the worst case terminate that staff.


In order to implement this, you need to establish the fact that every job responsibility that you assigned to your staff is a  performance agreement. It’s a contract where both parties agreed upon. Your staff will agree to complete all the tasks mentioned in the agreement, as a result, you will reward him/her with a good performance appraisal leading to future job incentives. Although this looks too formal, it works. Staff will immediately start to take their job more seriously because they are now clear about their scope of activities and also with reward and punishment associated with it.

Remember, a delegation of work doesn’t mean that you are free from your accountability. Accountability and Responsibility sound similar but are totally different concepts. You can delegate your responsibility but you can never delegate accountability. Accountability literally means to stand up and be accounted for. Therefore, you need to keep close eyes on your team.

Finally, you have now created a department that will work as a system with all the nuts and bolts at the right places, this will help you to achieve any objectives that you have set for your department.

Thank you for reading. Please like and share if you have found it useful.

Next Article: On AML/CFT Training Plan


Kiran Kumar Shah