New regulatory requirements under the fourth EU Money Laundering Directive (MLD4) will encompass more sectors. And that is regardless of the UK’s membership of the European Union, as any company providing financial services in the EU will need to comply, a financial checking agency points out. If you are in the finance sector, now is the time to prepare, it is claimed, to avoid fines for non-compliance.
John Marsden, Head of ID and Fraud at Equifax, says: “The UK’s advanced digital economy and large financial services sector makes it a prime target for money launderers, terrorist financers and cyber criminals. Companies providing financial services must implement MLD4 by June 2017, while also maintaining compliance with previous financial crime regulation. As more sectors are swept into the fold of regulatory commitments to tackle financial crime, the stakes are high to avoid the financial and reputational damage associated with inadequate screening measures.
“The increase in regulatory action has recently honed in on companies failing to handle politically exposed people (PEPs) appropriately. These individuals hold positions within governments or international organisations, and have power or influence that can leave them exposed to corruption, especially bribery or extortion. PEPs are firmly in the sights of regulators, along with their relatives and close associates (RCAs). While they are not necessarily subject to asset freezing and can be taken on as customers, regulators expect companies to have enhanced due diligence in place to efficiently identify and monitor them. Screening must be an ongoing process to ensure status changes are captured.
“Although compliance is already a top focus for many organisations, at a fundamental level they must be able to demonstrate that they have appropriate checks in place. Central to this is an understanding of their obligation to fight untoward financial activity and implement robust anti-money laundering procedures. If companies fall short of regulatory expectations, they risk multi-million pound fines. It is also essential that businesses have the right technology in place to handle the copious amounts of data involved, and ensure that the extra checks don’t negatively impact business operations or the customer experience. With pressures to meet regulatory requirements only set to rise, financial companies must prepare now to fight the risks of financial crime.”
Briefly, the EU move is towards countering terrorist financing and increase transparency about who really owns companies and trusts. The European Commission proposes to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Anti-Money Laundering Directive. Věra Jourová, the EU’s Commissioner for Justice, Consumers and Gender Equality said: “The update of the Fourth Anti-Money Laundering Directive will prevent any loopholes in Europe for terrorists, criminals or anyone trying to play with taxation rules to finance their activities. Better cooperation to fight these issues will make the difference.”
Background: visit http://ec.europa.eu/justice/newsroom/criminal/news/160705_en.htm.
