Just a few days until the 5th AML legislation comes into force

Tuesday 7 January 2020 10:55 CET | News

At the end of 2019, the British Government introduced the Fifth EU Money Laundering Directive (5MLD), which will come into force on 10 January 2020.

The new regulations update the UK’s Anti-money laundering (AML) administration and will integrate international standards set by the Financial Action Task Force (FATF). Furthermore, while this is an amendment to existing legislation, the new directive will require instant action from businesses operating in the financial services sector if they have not already implemented the required changes.

Professional service companies will be required to enhance their due-diligence checks and install AML training for their staff, as well as make use of electronic verification ‘wherever possible’.

The new wording in the legislation states that businesses must use electronic verification for anti-money laundering checks wherever possible, as opposed to only looking at paper documents such as passports and driving licenses.

Overall, paper checks can still be used in some circumstances, but accountants who wish to use electronic identification processes can do so if they satisfy themselves that they are a reliable source.

The new regulation stipulates that when assessing the need to enhance due diligence and seek additional information and monitoring in certain cases, businesses will need to consider a number of high-risk factors, like relevant transactions between parties based in high-risk third countries, the customer is a third-country national seeking residence rights or citizenship in exchange for transfers of capital, and others.

Businesses will also be required to update their records relating to the beneficial ownership of corporate clients, understand the ownership and control structure of their corporate customers and record any difficulties encountered in identifying beneficial ownership.

More: Link

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Keywords: 5MLD, money laundering, fraud prevention, anti money laundering checks, regulation, due diligence
Categories: Fraud & Financial Crime
Countries: United Kingdom
This article is part of category

Fraud & Financial Crime