Anti Money Laundering News

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By Lesley Byrne, Director of Regulatory Monitoring

3 August 2017

Additional summary points will be added to this page frequently. Please keep visiting for an update.

News alert 16 August 2017: New PEP Guidance issued

The FCA have recently issued guidance on the treatment of Politically Exposed Persons (PEPs) for AML purposes.  The guidance can be obtained on the publication section of the FCA website:

  • There is useful guidance on who should be treated as PEPs.
  • The requirements of the Money Laundering Regulations 2017 are highlighted, especially the requirement that each PEP must be risk-assessed on case-by-case basis.
  • UK PEPs (family members and associates) should be treated as low risk, unless there are other risk factors not linked to their position as a PEP meaning they pose a higher risk.
  • The Financial Ombudsman Service will consider complaints from PEPs, their family members or close associates – and will take the guidance into account.

News alert 11 August 2017: New AML Accountancy Sector Guidance

New AML Accountancy Sector guidance has been published to provide practical guidance on the implementation of the new AML Regulations. This guidance replaces the previous CCAB Guidance issued in 2008. It is in draft form as requires HM Treasury Approval.

All MLROs and AML Compliance Principals should read this guidance, and share it with relevant principals and staff, as required. Our future AML monitoring is likely to focus on compliance with both the requirements of the new regulations and this associated guidance.

The guidance can be accessed on the CCAB website https://www.ccab.org.uk/reports.php. I

It is understood that further guidance will be issued in due course in relation to some specialist areas, including insolvency (IPs will be contacted separately once insolvency guidance is issued).

News alert: 26 June 2017: The new Money Laundering Regulations 2017 go live

The Government published the new regulations on Friday 23 June 2017, which came into force with effect from Monday 26 June 2017. They bring in very significant changes to the UK’s Anti-Money Laundering (AML) regime and will have wide-reaching changes for our firms. For further details please see below.

New Money Laundering Regulations 2017 (Published 26 June 2017)

UK Government publishes the draft 2017 Money Laundering Regulations
(First published 18 May 2017 – now superceded by final regulations)

The UK Government published the draft 2017 Money Laundering Regulations in March this year and, in spite of the General Election on 8 June, these will still come into force on 26 June 2017 ( subject to any final amendments).

At the same time, the UK Government also published its response to the 2016 consultation on the AML Supervisory Regime. In short, the outcome of that is the proposed creation of a new oversight body for the accountancy and legal professions – The Office for Professional Body AML Supervision or OPBAS. The regulations to establish this body have still to be set out but it is expected that it will be operational by 1 January 2018.

There are very many issues arising for the creation of OPBAS affecting both ICAS, as a supervisor, and consequently our supervised firms. We have already held an informal meeting with the team at the Financial Conduct Authority charged with setting up the body. We will in the coming weeks be reaching out to our firms to discuss with them the impact of the new regime may have. This will involve working groups and wider publicist of the administrative changes. Please keep visiting this page for the latest information.

Meanwhile here are some of the main changes in the new 2017 Money Laundering Regulations:

  1. Politically exposed persons (PEPs): the definition has been widened to include domestic PEPs and their family members and known close associates and clarification given that a PEP must be a prominent public figure in a senior role;
  2. Beneficial owners (BOs); the definition of a BO remains at 25% share capital or control of an entity; however, BOs now have to have their identity verified; it is noted that simple reliance on the new persons of significant control register held by a company may not be enough;
  3. The registration limit for high value dealers is reduced to €10,000 from €15,000.
  4. Firms are now required to carry out an overall firm wide risk assessment and, on request, submit this to its supervisor;
  5. All policies and procedures must be approved in writing by a senior management person;
  6. There is a new requirement for an independent audit of the compliance with the policies and procedures. At this time it is unclear what the term ‘independent audit’ means in this context and we are urgently seeking clarification;
  7. Sole practitioners with no staff or sub-contractors are excluded from the requirements at 5 and 6 above.

These and other matters, as well as the implications of OPBAS, will be fully covered in the 2017 series of practice management courses.

Related articles will be added to this page frequently.

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