The FMA currently supervises around 800 reporting entities (REs), of which roughly two thirds are financial advisers, and while REs have made "some progress" toward meeting their AML obligations it's planning to increase monitoring in areas such as staff training, documentation and management oversight.

According to its latest monitoring report, the FMA conducted 12 on-site visits and12 desk-based reviews and says that it's "particularly concerned" about the continued low level of filing suspicious transaction reports (STRs). Only 47 STRs were filed by FMA supervised REs compared to the 8,415 STRs filed from non-supervised REs. As a result, the FMA plans to conduct training in 2017 in conjunction with the Financial Intelligence Unit.

The FMA also examined 29 independent Section 59 AML/CFT audit reports, but says it found that "a concerning number" of REs who did not complete section 59 audits and it expects to take regulatory action against them.

The monitoring report also highlights what it sees as a continued lack of staff training effort to detect and prevent money laundering and terrorist financing activities, as well as variances in the quality and way in which REs conduct due diligence on high-risk customers.

After the release of the Panama papers, the FMA says it carried out a number of targeted visits to identify whether REs had policies and processes in pace for identifying high-risk customers and whether they had any business relationship with Mossack Fonseca and its affiliates.

Looking ahead to 2017, the FMA says it plans to increase desk-based and on-site monitoring, look at what on-going training programmes for staff and continue its focus on governance at a senior management level.

An adviser's guide to AML Compliance