In a few weeks new Money Laundering Regulations come into force, implementing the EU Fourth Money Laundering Directive.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations - as they are properly called, will replace the current Money Laundering regulations which have been in place since 2007.

While some aspects of the Fourth Directive were already addressed by our existing AML regulations, some significant changes are still being proposed, which will impact on the AML processes you follow.

Overview of key changes

Risk Assessments

Regulated firms, including solicitors, must carry out a risk assessment as part of any client & transaction vetting process.  There are a variety of factors which need to be taken account of detailed in the draft regulations (see Regulation 18)

There are a list of specific circumstances where enhanced due diligence will be required.  Factors listed in the draft regulations (Regulation 33) which may impact on the need for enhanced due diligence include where the client 'is a legal person'.  The definition of 'Politically Exposed Persons' has also been expanded - and extended due diligence will be required for such persons for a year after they have ceased to be defined as a PEP.

More Policies & Procedures

The new regulations contain a lot more detail on the policies and procedures required in relation to anti-money laundering. 

Depending on the size and type of business, firms must appoint someone at board level to manage compliance with the regulations.

Employees, and also agents, must be screened in advance of appointment,  and at intervals thereafter.

Training

Training has always been an important part of AML requirements, and the new regulations are no exception.  There is now likely to be a requirement to include data-protection training as part of the regular training provided.

Watch our webinar

Click on the slide below to register and watch our latest AML webinar, presented by Amy Bell, a Risk Consultant for Lockton, with specialist experience of AML in law firms, and adviser to the Law Society of England & Wales on AML.