Anti money laundering directive: no names still a shame
Revised anti money laundering directive is still not explicit enough
The recent consultation paper on the implementation of the third money
laundering directive was a welcome step in the government’s high profile anti
money laundering programme.
Overall, the paper strengthens existing anti money laundering controls,
pushing to ensure compliance with measures previously considered loosely to be
‘best practice’. However, too many grey areas still remain.
It provides greater clarification in terms of dealing with politically
exposed persons. It defines who they are in terms of social and political groups
and imposes stricter due diligence requirements for identifying them.
However, the consultation paper decides against publishing a list of named
individuals, thereby failing to address existing concerns over how to best
identify those who fall within this group.
So where do firms go to address this? What additional information can the
government provide businesses with if we are not able to gain access to these
names?
Firms must now show that they are compliant with the revised joint money
laundering steering group, the only treasury-approved guidance on anti money
laundering, or face financial penalties for failing to meet those standards.
The document also clarifies which trade bodies will be responsible for
regulating certain business sectors. This is certainly a much-needed step
forward and should help to streamline processes and responsibilities, bringing
everyone into line from areas that were previously unregulated or loosely
regulated and therefore more vulnerable to fraud.
Providing a clear audit trail in terms of compliance will become paramount,
with electronic verification – already at an advanced stage of maturity in the
UK – becoming crucial for all those involved.
One of the key purposes of the money laundering directive is to help assure
other governments and financial institutions that the UK has clean markets.
This paper is certainly a move in the right direction. With it, officials
have tightened regulations and introduced greater supervision of anti money
laundering products. But the directive fails to be fully, explicit or
authoritative enough on some key issues, leaving many of those responsible for
compliance still in the dark.
Melanie Mitchley is director of industry relations at
Callcredit