The Fifth Money Laundering Directive transposed into the Money Laundering and Terrorist Financing (Amendment) Regulations 2019.
Comes into force today – 10 January 2020.
The main requirements of the updated Regulations are as follows:
Politically Exposed Persons – Firms need to be confident that they are using correct PEP definitions and PEP data they rely on is accurate and up to date.
Beneficial Owners – The UK will be required to maintain a register of beneficial owners. The UK has already adopted this by creating the Register of Persons of Significant Control which is available via Companies House. Firms will be required to report any discrepancies identified when comparing their own checks against the public register.
Customer Due Diligence in Onboarding – The new Directive recognises the growing trend for the use of digital identity and electronic verification in the customer onboarding process. Firms should use electronic identification wherever possible
Enhanced Due Diligence – This requirement is designed to create a common interpretation of what enhanced due diligence measures are when conducting checks on an entity from a high risk country. The European Commission publishes a list of countries that are considered as High Risk third countries of which there are currently 23 countries. Firms need to have a policy and procedure to ensure that when the risk based approach indicates a high level of risk, the appropriate checks are defined, implemented and in line with the updated Regulations. Such checks would need to be in depth and explore the wider risk.
For advice and assistance to ensure compliance with the updated AML Regulations, get in touch.