As the six month countdown to implement the fourth EU Money Laundering Directive (MLD4) begins, companies need to ensure they are ready for the new requirements, or they risk hefty penalties.
John Marsden, Head of ID and Fraud at Equifax (pictured above) stressed: “At least £100 billion, equivalent to the GDP of Ukraine, is reportedly being laundered through the UK every year.
“Financial services providers are vital in the fight against financial crime and its damaging impact; only by implementing robust screening processes and checks on potential customers can they help reveal hidden launderers among the mass of genuine individuals. Combined with the risk of substantial fines if requirements of MLD4 are not met, companies have plenty of reason to ensure their systems are fully prepped for the July deadline.
“The major change companies must take on board is the way they handle politically exposed people (PEPs). These individuals hold some element of political power, making them potential targets for bribery and corruption, and are firmly in the eye of the regulator.”
“MLD4,” he added, “hones in on this group to a greater degree than previous regulation by encompassing domestic politicians. UK companies must now have enhanced due diligence in place to efficiently identify and monitor UK politicians and their associates and relatives, who in turn must carefully document where their finances come from.
“Companies must also be aware of the ‘tipping off offence’ under the Directive, which could see additional fines for making those under investigation aware of the situation.
“Financial crime has serious social and economic impact. The crackdown is becoming more prevalent, as evidenced by the Criminal Finance Bill and establishment of the Joint Money Laundering Intelligence Taskforce, and companies must act now to ensure they play their part.”