20 years ago today, on 1 March 2004, the Money Laundering Regulations 2003 came into force. Maybe we should celebrate the anniversary with a cake!
On 1 March 2004 for the first time High Street accountancy practices, tax advisers and auditors were brought into the ‘regulated sector’ and made subject to money laundering regulations in the UK.
The 2003 Regulations
Those 2003 Regulations required accountants etc to (i) obtain evidence of identity when taking on a new client, (ii) retain copies of ID documents, (iii) train relevant employees, and (iv) report suspicions of money laundering. The major accountancy bodies became supervisory bodies for AML purposes.
The 2003 Regulations were relatively brief!
The 2007 Regulations
The first revolution came with the 2007 Regulations. These required Customer Due Diligence measures to be applied on a risk sensitive basis to existing (as well as new) clients – including consideration of beneficial owners – and explicitly introduced the concepts of simplified and enhanced due diligence, ongoing monitoring and politically exposed persons. These Regulations also required firms to establish and maintain appropriate and risk sensitive policies and procedures. The Regulations specified 22 professional bodies as supervisory authorities from December 2007.
The 2017 Regulations
The 2017 Regulations are much more detailed and prescriptive than the 2007 ones – and indeed further detailed requirements have been added by subsequent amendments. In particular the latest Regulations go into more detail in requiring a statement of AML Policies, Controls and Procedures and a Firm-wide AML Risk Assessment document. There are new prohibitions on an individual with certain convictions from becoming a beneficial owner, officer or manager of a regulated firm.
An amendment effective from January 2020 requires regulated firms to report discrepancies in PSC information held at Companies House. A more recent amendment requires firms to address the risk of proliferation financing.
The future?
There can be no doubt that Money Laundering Regulations are here to stay and the requirements over time can be expected to become even more onerous.
Some day we may refer to today’s AML arrangements as ‘The Good Old Days’!
If you are concerned that your firm’s AML compliance is inadequate, or even non-existent, get in touch now using the link below and we can work together to fix this. The hardest part is getting started.
