And then there were 5...MLD
Updated: Jan 16
4MLD was enforced less than 3 years ago, yet already it will be replaced next week with the Fifth Money Laundering Directive. As high profile tax evasion scandals and crypto-scams regularly appear in the headlines, in addition to increased instances of cybercrime and terrorist financing, it's time we all do our bit to flush out opportunists.
Even if we take out the human cost of financial crime to focus on the monetary aspect (and that's no mean feat when this includes individuals exploited through trafficking, victims of fraudsters or those impacted by terrorist activities), criminals successfully stole £1.2 billion through fraud and scams in 2018. Fortunately, UK Finance detail how innovations working alongside regulation has stopped more than £1.6 billion of unauthorised fraud. Compliance is not merely a tickbox exercise!
5MLD requires all EU Member States to implement these amendments to National Law by 10 January 2020
enhanced Due Diligence Checks
simplified Customer Due Diligence
more accessible Politically Exposed Persons identification
systematic monitoring and reporting via UK Financial Intelligence Unit
greater transparency of beneficial ownership
The FCA will continue to supervise the financial sector, but will also regulate all businesses carrying out certain cryptoasset activities or at risk of facilitating money laundering or terrorist financing. Examples include: retailers of shopping/gift cards, property agents, art / collectable brokers, and - with Travelex literally confirming moments ago that their site has been taken offline to deal with a cyber attack - prepaid travel card providers. Training no longer focuses on what to do IF there is an incident, but what to do WHEN there is an incident. In another article, I explore why employee engagement can strengthen a business' ability to recover from such incidents. Again, Compliance should not be considered a tickbox exercise!
FCA Compliance training is already embedded within the culture of the financial services industry; employees regularly receive training identifying their responsibilities to ensure the effectiveness of systems and controls. But for businesses now benefitting from crytoassets / virtual currency, the Financial Conduct Authority have produced useful resources that can help. With a standardised approach adopted globally, data privacy and money laundering regulations together with heightened awareness of cyber crime models have made it easier to act in response to their fraudulent activities. The FATF (Financial Action Task Force) report on ever-evolving
Methods & Trends, as well as making recommendations to offset such attempts.
The easiest way to stay up to date with regulation changes that evolve as quickly as the newest financial crime scheme, it's worth subscribing to cloud based tech. Again, the FCA have updated their recommendations and guidance clarifying regulator expectations, in relation to documentation, risk assessments, and governance around Cloud outsourcing arrangements. In answer to these expectations, providers such as EY explain how they can support those new to the sector as well as established AML/CTF specialists:
There's no need to feel unable to meet our responsibilities, with cross-sector collaboration and regular updates and recommendations, we can all do our bit to strengthen our resilience.
What is Imagimont?
I'm Jo, a Freelance Learning Experience Designer at Imagimont Ltd. With a creative flair and commitment to engagement, I manage development projects that align to the organisation’s culture, values and business strategy. Partnering with internal stakeholders and external providers, I deliver blended learning resources fully accessible using multimedia at the point of need. My commercial awareness, UK Regulatory Compliance expertise and 10 years’ experience as a People Development Specialist ensure that learning initiatives evolve as quickly as service expectations.
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