Complete Guide to Prepare a Compliant AML Manual

1. What is the purpose of the AML Manual?

The purpose of an AML Manual is to serve as a comprehensive guide outlining a company’s internal policies, procedures, and controls to prevent money laundering and terrorist financing. It ensures that all employees understand their obligations and that the organisation operates in compliance with national and international AML laws and regulations. 

The Manual should clearly define the AML framework and outline procedures that align with legal and regulatory requirements. 

In essence, its key purposes are to:

• Establish the Internal AML Framework: Set out the company’s internal policies, controls, and reporting structures. 
• Guide Employees and Promote Awareness: Provide employees with clear guidance on recognising and reporting suspicious activities.
• Ensure Regulatory Compliance: Align the organisation’s operations with relevant AML and counter-terrorist financing (CFT) standards.

This AML Manual is binding upon all departments and employees of the Company. It serves as a foundational framework for ensuring compliance with anti-money laundering regulations and must be adhered to by every individual, regardless of their role or level of responsibility. All staff are expected to understand and apply the principles outlined herein in the course of their duties. 

2. Anti-Money Laundering (AML) Function and responsibilities 

The AML, Compliance, and Risk Management functions together comprise an investment firm’s Second Level of Control. To fulfil its mission, the Second Level of Control identifies risk areas, detects situations that require enhanced monitoring, develops and formalises risk assessment policies, and monitors the adequacy and effectiveness of those policies once implemented. 

The AML Function occupies a senior position within the firm’s organisational structure and must be entrusted with the necessary authority and resources to perform its role effectively. It is responsible for developing and implementing anti-money laundering policies and procedures, ensuring compliance with applicable laws and regulations, maintaining up-to-date records and documentation, and performing ongoing risk assessments. 

Adding to that, an investment firm must ensure that its AML Function operates effectively and independently. Adequate human and IT resources must be allocated to support the AML Function, enabling continuous monitoring of money laundering risks. Its activities should be performed on a permanent and ongoing basis, rather than only in specific circumstances, and must remain independent from senior management and other operational units. 

The responsibility for the development, maintenance, and implementation of the AML Manual lies with the AML Compliance Officer (AMLCO). The AMLCO ensures the manual is aligned with applicable AML/CFT laws, CySEC directives, and international standards, and that it is communicated effectively across the organization. 

The Board of Directors (BoD) on the other hand is responsible for approving the AML Manual and any subsequent amendments. Approval must be documented through formal meeting minutes, ensuring governance and accountability in line with regulatory expectations. 

3. What are the contents of the AML Manual? 

While the specific structure and depth of an AML Manual may vary depending on the nature, size, and risk profile of the organisation, certain key components are essential for ensuring compliance and operational clarity. 

A. Introduction & Definitions

Outlines the purpose, scope, and regulatory framework underpinning the AML Manual, while defining key terms and abbreviations for consistency across departments. 

B. Governance & Responsibilities

Details the governance structure, roles, and responsibilities of the Board of Directors, Senior Management, the AML Compliance Officer (AMLCO), and other relevant functions involved in AML compliance. 

C. Risk-Based Approach

Explains how the firm applies the risk-based approach (RBA) in line with the European Banking Authority (EBA) Guidelines. It describes the identification, categorisation, and management of AML risks according to clients, products, geography, and delivery channels.

D. Client Acceptance Policy

Outlines the criteria and decision-making process for accepting or rejecting clients. The policy should ensure that high-risk clients are subject to enhanced due diligence and that the company maintains a clear risk appetite consistent with regulatory expectations. 

E. Customer Due Diligence (CDD)

Defines the KYC process and the documentation required to verify clients’ identities. This section should address standard, simplified, and enhanced due diligence measures, as well as verification procedures for natural persons and legal entities.

F. Ongoing Monitoring

Sets out the procedures and frequency for reviewing client activity and transactions, ensuring that any anomalies or deviations from expected behaviour are promptly detected and escalated to the AMLCO.

G. Suspicious Transaction Identification and Reporting

Describes how to identify and report suspicious activity, including examples of red flags such as unusual transaction patterns, dealings with high-risk jurisdictions, or inconsistent client profiles. This section must explain the internal reporting process to the AMLCO and, where applicable, the submission of Suspicious Transaction Reports (STRs) to MOKAS in ensuring confidentiality and timeliness.

H. Recordkeeping

Specifies the retention period for AML-related documentation in accordance with applicable laws and regulatory guidance, ensuring records are accessible and securely stored.

I. Regulatory Reporting Requirements

Outlines the company’s reporting obligations to the regulator, such as CySEC’s annual AMLCO report and monthly prevention statements, detailing submission timelines, formats, and responsibilities.

J. Staff Education and Training

Highlights the importance of regular AML training in fostering a culture of compliance. The section should describe the training responsibilities of the AMLCO, the content and frequency of training, and employees’ obligations to participate. 

Final Thoughts

In 2026, maintaining a compliant AML Manual is no longer a routine task, it is a strategic imperative. A well-designed and regularly updated manual not only ensures regulatory compliance but also strengthens internal controls and risk management. It acts as a central reference point for staff, guiding them in identifying, reporting, and mitigating financial crime risks. With proper training and the right tools, firms can evolve their AML Manuals into proactive systems that support operational resilience and regulatory readiness. 

In collaboration with the Institute for Professional Excellence (IforPE), SALVUS offers a self-study CPD course titled “Complete Guide to Prepare a Compliance AML Manual.” This course is designed to provide comprehensive knowledge and practical insights into drafting and maintaining a compliant AML Manual.

If you require support with your AML/CFT regulatory compliance obligations or you are interested in our IforPE courses, please contact us at compliance@salvusfunds.com. 

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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.