On February 4, the UK’s Joint Money Laundering Steering Group (JMLSG) announced proposed amendments to its anti-money laundering (AML) and counter-terrorist financing (CTF) guidance (the Guidance). The JMLSG is a UK-focused group of trade bodies which produces AML and CTF guidance to assist the financial services industry.
In the press release accompanying the Guidance, the JMLSG noted that the proposed amendments are a response to the updated Money Laundering Regulation 2017 (the Regulation), which itself is the UK’s implementation of the EU’s fifth Money Laundering Directive (for more information, please see the January 10 edition of Corporate & Financial Weekly Digest). The proposed amendments also are a response to the Financial Action Task Force’s updated standards (please see the July 12, 2019 edition of Corporate & Financial Weekly Digest).
The JMLSG’s proposed amendments include the following:
- updating customer due diligence (CDD) guidance to clarify the “e-money-specific exemption” and incorporate the International Tax Compliance Regulations 2015 requirement to apply CDD to existing customers in certain circumstances;
- constricting the situations to which simplified due diligence (SDD) can be applied, and requiring firms to document their decision to apply SDD. The amendments also clarify when and how enhanced due diligence should be applied;
- adding four more illustrative risk factors, concerning beneficiaries of life insurance policies with no “obvious links” to the policy holder; third-country nationals buying EEA residence rights or citizenship; the use of “electronic identification;” and transactions related to oil, arms, precious metals, tobacco, cultural artefacts, ivory, or other items of archeological, historical, cultural and religious significance;
- updating guidance relating to electronic identification, digital identity and other electronic data sources;
- adding “anonymous safe-deposit boxes” to the list of prohibited anonymous products;
- adding guidance relating to the beneficial ownership register and other provisions to monitor the registration of companies; and
- adding letting agents, antiquities and art market participants, cryptoassets exchange providers and custodian wallet providers to the list of financial sector firms to whom the Regulation applies.
The proposed amendments to the Guidance are available here, and the consultation closes on April 3.