MLRO Review & Escalation Overview

Purpose#

The MLRO review and escalation overview explains how the reviewer can prepare decision-quality escalation materials. The MLRO or authorised reviewer remains accountable where implementation policies require it.

MLRO escalation triggers#

the reviewer should escalate to MLRO when any of the following appear:

  • Likely or true sanctions match.
  • Possible ownership/control by a sanctioned person or entity.
  • Suspicion or reasonable grounds to suspect ML/TF/PF.
  • PEP with serious unexplained source of wealth/source of funds risk.
  • Serious adverse media tied to fraud, corruption, organised crime, sanctions evasion, TF or PF.
  • Customer refuses to provide material CDD/EDD information.
  • Activity inconsistent with profile and cannot be plausibly explained.
  • High-risk country exposure combined with opaque ownership or unusual transaction pattern.
  • Potential tipping-off risk.

MLRO escalation memo structure#

# MLRO Escalation Memo

## 1. Case summary
Customer / counterparty / transaction / relationship.

## 2. Trigger
What triggered escalation.

## 3. Facts established
Only evidence-backed facts.

## 4. Open questions
Material gaps and unresolved inconsistencies.

## 5. Source basis
Source IDs and implementation policies or policy references.

## 6. Risk factors
Customer, country, product, delivery channel, transaction, sanctions, PEP, adverse media.

## 7. Evidence index
Documents, screenshots, search results, registry extracts, screening outputs.

## 8. Reviewer assessment
Preliminary risk view, not final legal conclusion.

## 9. Recommended MLRO options
- Request information.
- Continue with EDD and senior approval.
- Reject onboarding / exit relationship.
- Freeze/no-dealing escalation under sanctions process.
- File STR/SAR or equivalent report.
- No report, record rationale.

## 10. Tipping-off controls
What the front office/customer-facing team must not disclose.

MLRO decision log#

Every MLRO decision should preserve:

  • Date and time.
  • Decision-maker.
  • Facts considered.
  • Sources consulted.
  • Decision.
  • Rationale.
  • Follow-up actions.
  • Review date.

STR/SAR support note#

The reviewer may draft internal suspicion narratives. It should not submit external reports unless explicitly integrated with the regulated firm’s approved reporting workflow.

FIU and asset-recovery escalation context#

Egmont materials distinguish the FIU's receipt, analysis and dissemination role from the institution's internal review. SRC-EGMONT-ASSET-001 adds context where financial intelligence may support asset tracing or securing.

The MLRO escalation pack should clearly separate:

  • internal suspicion and evidence;
  • proposed reporting action;
  • assets or transactions requiring preservation attention;
  • legal or sanctions questions;
  • actions that only an FIU, court, regulator or law-enforcement authority can take.