Anti-money laundering remains a top priority for the FCA in 2016/17, as emphasised in its latest anti-money laundering report. The regulator will be focusing its supervision on higher-risk firms and use its enforcement powers where it identifies firms with material weaknesses in their money laundering controls.

The Fourth Anti-Money Laundering Directive (4MLD) together with the Regulation on information accompanying transfers of funds (WTR) came into force on 25 June 2015. The European Commission has called on Member States to bring forward the implementation of the 4MLD and WTR into their domestic legislation to 1 January 2017.

The 4MLD makes a number of key changes including:

  • enhancing the risk-based approach, coupled with new multi-level interconnected risk assessments;
  • expanding the definition of politically exposed person;
  • extending administrative fines and sanctions for individuals and firms for non-compliance; and
  • placing greater responsibility on senior managers.

The WTR also requires the following key changes:

  • the Payment Service Provider (PSP) of the payer to include further information when transferring funds to the payee;
  • establishing effective risk-based procedures for both the PSP of the payee and the intermediary PSPs; and
  • the PSP of the payee to verify the accuracy of the information on the payee for fund transfers over EUR 1,000 (or equivalent).

We have recently published a new anti-money laundering brochure, EU Fourth Money Laundering Directive – getting ready. If you would like to receive a copy of the new brochure please contact Lisa Lee Lewis, John Davison or Simon Lovegrove