Snazzy title eh, the 5th EU Anti Money Laundering Directive; yes there’s been five so far. This one, enacted in 2020, has toughened up the rules and included a few more entities to good old fashioned identity verification, which we all love.
Six areas to consider:
- Crypto Currencies, better known for BitCoin, have been caught under Customer Due Diligence (CDD) – the regulator's word for extreme verification of identities. Cryptocurrencies are huge opportunities for criminals as it’s nigh impossible to track people who use them. Scammers use them for their ransom payments. Travelex, have been held ransom for over two weeks now, with a ransom of $6 Million payable in BitCoin. The police would love to track them down. Any firm involved in receiving and paying in any cryptocurrency will need to adhere to all things Anti Money laundering – CDD, Money Laundering Reporting Officers, training, policies etc. Even Facebook, with their Libra currency, will have to obey.
- New Club Members. New kids on the block include Letting Agents, art dealers, tax advisory services. Dealing in these new high-value goods and services will include them in Anti Money laundering procedures.
- PEPS or Politically Exposed Persons receives an overhaul. PEPs are people in prominent public positions, who are susceptible to money laundering bribery because of their position in society. The UK must now create a definitive list of who is categorised as a PEP. I think Meghan will top the new list.
- Pre-Paid Cards. Thinking of buying a pre-paid card for your holiday currency spending needs. If it’s worth 150 Euros or more, the firm selling you the card will start asking for more ID as they’re also included under the rules.
- High-risk countries now receive more attention from the regulators with enhanced identification requirements for any transactions emanating from these countries. Watch out all those Nigerian Princes wanting you to share their £20 million windfall. Or Somalian pirates wanting to launder their ill-gotten gains.
- Electronic AML checks. This is the one that’ll affect mortgage brokers and advisers mostly. It’s becoming mandatory that lenders use electronic checks to evidence identity and any issues with customers. The market leader in this is SmartSearch.com – check them out – and Experian and Equifax are involved too. For a subscription, lenders can run customers through the system and in 30 seconds have a fully compliant check done without any paperwork or photocopies of passports etc. clogging the system. Brilliant solution and this will speed things up nicely. Instant checks from a central database of information – the PEP register will be included, police databases, voter’s roll, government websites – will all be checked in a millisecond.
So that’s 5AMLD.