The 4th Money Laundering Directive what constitutes money laundering

The 4 th money laundering directive proposal was published earlier this year and will take some time to be implemented in the UK, with the directive allowing a maximum of two years for implementation. However, the EU press release issued on 5 february 2013 highlights what is coming:

• the inclusion of an explicit reference to tax crimes as a money laundering offence.

• the requirement for all regulated entities to have a written risk assessment of its AML risks and to have written policies and procedures those policies and procedures will need to include policies and procedures on employee screening in addition to the existing requirements.

• A mechanism to help identify beneficial owners. Under the new rules companies will be required to hold information about their beneficial owners and disclose this to appropriate authorities and to entities providing them with regulated services.What constitutes money laundering

similarly, trustees will be required to “hold adequate, accurate and current information on beneficial ownership regarding the trust” and disclose it to entities providing regulated services. This information must “include the identity of the settlor, of the trustee(s), of the protector (if relevant), of the beneficiaries or class of beneficiaries, and of any other natural person exercising effective control over the trust”.

• A halving of the current €15,000 cash limit for high value dealers (HVD) to €7,500. Allowing for currency fluctuations the new safe limit in the UK will represent about £6,000. As before, anyone selling goods for cash in a single or series of linked transactions in excess of the new limit will need to register with HMRC as a HVD. Wherever a customer pays cash above the limit the HVD will need to carry out the normal risk assessments, customer due diligence (ID) checks and report suspicious activities.What constitutes money laundering

• an extension of politically exposed persons (PEP) to include domestic as well as foreign people entrusted with prominent public functions i.E., your local MP will become a PEP.

• the requirement for UK holding companies with overseas branches or subsidiaries in jurisdictions with less rigorous AML regimes to apply the UK regime in those places, unless prohibited by that country’s laws. Countries with any such prohibition will quickly come under pressure from EU states to modify their laws. Ultimately, holding companies could be requested to cease operating in such countries.

• the broadening of the scope of the regulated sector beyond casinos to cover the gambling sector in general.

• the extension of the regulated sector to include “real estate agents, including letting agents”. The addition of letting agents is new.

Back to accountancy practices

Much of the professional regulated sector have realised the benefits of operating smartsearch giving them a single platform for all of their individual and business AML, sanction PEP compliance requirements.What constitutes money laundering the ability to retain all of their AML verification data and outcomes in a real-time environment where information can be retrieved on demand to satisfy any internal audits or regulatory visits. Read more much of the professional regulated sector have realised the benefits of operating smartsearch giving them a single platform for all of their individual and business AML, sanction PEP compliance requirements. The ability to retain your AML verification data and outcomes in a real-time environment where information can be retrieved on demand to satisfy any internal audits or regulatory visits; this is just one of the features that saves our clients time and cost and gives them peace of mind to concentrate on their own business matters. Read more when the regulator changed from OFT to HMRC this increased the focus on AML, sanction PEP compliance. As a consequence an ever increasing number of firms have upgraded their compliance regimes to incorporate electronic verification, demonstrating their compliance with regulations in a much more efficient and cost effective manner significantly reducing their operational risk.What constitutes money laundering read more banks, building societies financial communities are steadily catching up with the professional regulated sectors with an increasing number of financial organisations switching to smartsearch for their AML, sanction PEP compliance. These communities are not renowned for being early adopters as they typically have long standing legacy IT systems that usually take several years to implement change. Read more networks and compliance specialists provide their clients with large range of support products and services. SmartSearch partners with some of the largest networks to provide their members with fully integrated cost effective AML, sanctions PEP solutions, helping firms to comply with the latest money laundering regulations. Read more the offence under proceeds of crime act (POCA) relates to any activity involving criminal or terrorist property.What constitutes money laundering this is a much broader definition than the commonly understood definition of money laundering. A business can commit an offence under POCA by unwittingly facilitating an act of fraud.

Read more in the instant decisioning world of global stock markets “time is of the essence” therefore using traditional documents is a totally ineffective means of complying with AML regulations. Likewise checking against other mandatory data sources such as sanctions peps on a regular basis is not commercially practical unless this is fully automated. Read more