SmartSearch calls on government to act on new upcoming AML rules

Michael Lloyd

December 10, 2019

fca data

With new EU anti-money-laundering (AML) rules due to be implemented exactly one month from today, SmartSearch chief executive John Dobson has urged the government to act.

He penned an open letter to the Chancellor of the Exchequer calling for the government to publish the final regulations without further delay to give firms the certainty they need to prepare.

John Dobson, chief executive at SmartSearch, said: “Money laundering helps to finance some of the most serious criminal activity, from international drug cartels to people-trafficking and terrorism. Whoever is elected on Thursday has to get to grips with this issue fast.

“It is right that firms in affected sectors play a full part in tackling money laundering, but it is important also to recognise that this places a significant burden on businesses.

“The government should get on with publishing the new rules so that firms know where they stand.

“But businesses can’t afford to wait – there is already a very short timeframe between now and 10 January.

“They need to be taking action now to get ahead of the game and ensure they are fully compliant.”

The EU’s Fifth Money Laundering Directive (5MLD) came into force in July 2018 with an obligation on all member states to transpose the directive into domestic law by 10 January 2020.

The new regulations will have a significant impact on Know Your Customer (KYC) and due diligence processes for lenders, brokers, estate agents and introducers.

The UK government consulted on how it would go about meeting this obligation in April 2019.

But the political turmoil since then, and the uncertainty over the UK’s relationship with the EU, has caused the publication of final regulations to be held back.

In addition to immediate action to publish the regulations, AML specialists SmartSearch has called for electronic verification (EV) of identity to be made mandatory.

It said this is quicker than manual checks and more cost-effective to implement.

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