<img src="https://certify.alexametrics.com/atrk.gif?account=b2hlr1ah9W20em" style="display:none" height="1" width="1" alt="">

Crackdown on money laundering and terrorist financing begins today!

money laundering

New money laundering rules will come into force today, making it much harder for terrorists and criminals to move money through the UK's financial system.

The new regulations are part of the EU 4th Money Laundering Directive (4MLD) and will see businesses being forced to carry out more robust checks to ensure that money changing hands comes from legitimate sources, and won't be laundered or used to fund terrorism.

money launderingDownload our free training aid on 4MLD

According to HM Treasury, serious and organised crime is costing the UK an alarming £24 billion a year.

The new regulations are in place to reduce this figure, with its main emphasis being put on businesses to improve the quality of the checks they carry out in order to ensure that any suspicious activity can be spotted and reported quickly, meaning police will be able to do their job more effectively and put a stop to corruption or terrorist financing.

Follow these top tips to protect your firm from money laundering:

  1. Be sure to conduct risk-based due diligence - This includes for all customers, associates, consultants and third parties. The higher the risk, the higher the level of due diligence is required.
  2. Be clear about your company's rules for standard and enhanced due diligence - And be sure to apply them correctly! There are different rules for UK versus non-UK residents, as well as individuals versus private and public entities. Ask if you are not sure which rules apply.
  3. Watch out for red flags - Look out for anything which is unusual or suspicious. Pay particular attention to unusual behaviour (eg - decisions don't make commercial sense), transactions, high-risk customers and high-risk jurisdictions (ie - countries subject to sanctions).
  4. Obtain and independently verify documentary evidence - In order to confirm identification. money launderingKeep certified copies of this to prove that adequate checks were carried out. Don't assume that these checks have already been made unless you have clear evidence.
  5. Never use your knowledge of your firm's systems or controls to bypass checks - Do not collude with or otherwise assist anyone involved in money laundering or terrorist financing.
  6. Avoid tipping off anyone suspected of money laundering or terrorist financing that an investigation has been launched - There is a two year penalty if you break the rules.
  7. Report any concerns, knowledge or suspicions immediately - Report anything related to money laundering, terrorist financing, and Politically Exposed Persons (PEPs) to your MLRO.

Leave a comment

Tick

eBook: Essential Uncovered

Skillcast Essentials is our best-selling library and there's a reason for that. Essentials library provides comprehensive coverage of the key compliance / conduct issues that companies in the UK face today.

Download now

How to Manage the Compliance Personas in Your Company

Rory has no time for rules, especially the pointless ones that add a lot of work for no apparent benefit. When he encounters such rules, his first thought is to find a work-around. Andy doesn't mind ...

Read More
FCA Compliance News - November 2018

An overview of the most recent and upcoming changes to FCA guidelines for senior managers...   Regulatory Update The last six weeks have been a very busy time for the UK regulators, with both the ...

Read More
Compliance Essentials News - November 2018

This blog is dedicated to bringing you the news that touches the people dimension of regulatory compliance. It's not only about regulations, policies, procedures and systems. It's also about people, ...

Read More
Getting personal: five ways to engage staff with compliance training

It's an on-going struggle for most companies to engage their staff with compliance training. There's a constant stream of new regulations and tweaks to existing ones. And many of these require ...

Read More