Q & A Series | Anti-Money Laundering Regulations

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“What are my organisation’s responsibilities to comply with Anti-Money Laundering (AML) regulations?”

As criminals evolve their tactics to undetectably launder money, compliance with AML regulations is essential in order to protect businesses from becoming accomplices to crime.

According to the Annual 2020 assessment by the National Crime Agency (NCA), over £132 million was denied to criminals as a result of defense against money laundering requests during FY 2018/2019.

The power of adherence to the regulations and adequate AML policies and procedures is, therefore, essential in order to continue to combat the flow of illicit funds.

Key Legislation, Regulatory Boards and Associations

The legal framework of AML regulations

GLOBAL
  • The Financial Action Task Force (FATF)
  • Policy-making body that sets anti-money laundering international standards and counter-terrorist financing measures and recommendations globally. The FATF also assesses nations on their implementation and effective use of these standards.


  • EU - The 5th and 6th AMLD
  • The 5th AMLD came into effect January 2020.

    The 5th directive requires firms to examine the background and purpose of a wider range of transactions. It proposes, for example, extra EDD measures for business relationships and transactions in relation to high-risk 3rd countries.

    The 6th AMLD is to come into effect in June 2021.

    Aims to tackle legislative inconsistencies in order to fight money laundering more effectively and cooperatively. The aim is to create a harmonious legal definition of money laundering and its predicate offenses between the member states.


UK
  • The Financial Conduct Authority (FCA)
  • Regulates the UK financial sector, setting standards to combat financial crime such as money laundering and the funding of terrorism. In partnership with the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) to strengthen the UK’s anti-money laundering supervisory regime.


  • HMRC
  • HMRC is a supervisory body for Money Laundering Regulations. You can find a list here of all the supervisory and professional bodies which your firm might have to register with before trading.


  • The Joint Money Laundering Steering Group
  • Provides assistance and guidance to promote good practices and standards for firms when tackling money laundering. This group's guidance is backed by the HM Treasury.


  • The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019
  • Regulations require you to apply risk-based customer due diligence measures to prevent your services and business from being used for money laundering.


  • The Proceeds of Crime Act 2002
  • Sets out the framework of the criminality of money laundering, detailing the numerous offenses associated with this line of financial crime. It also mandates the need to submit a Suspicious Activity Report to the National Crime Agency if you know or suspect that a person is engaged in, or attempting, money laundering.

AML Fundamentals

Key responsibilities

To comply with AML regulations, you will need to:

  • appoint an MLRO (Money Laundering Reporting Officer)
  • perform a firm-wide risk assessment and review periodically
  • document your firm’s AML policies, controls, and procedures
  • ensure that all relevant staff are trained both on AML regulations and your internal AML procedures
  • carry out the appropriate due diligence, checks and ongoing monitoring of all new and existing clients
  • any employee who suspects money laundering should consult with their MLRO
  • the MLRO, if suspicious to activity of money laundering, should file a Suspicious Activity Report to the National Crime Agency (NCA)

How can Veriphy Help?

We help firms build the foundations and implement a successful anti-money laundering program via our Pillars of AML Compliance Initiative.

  • Bespoke AML Policy
  • Online AML Training
  • Range of Due diligence Checks

To learn more about our Pillars of Compliance Scheme, please click here.


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