4th Money Laundering Directive
On the 26th June 2017 the 4th Money Laundering Directive (4MLD) took effect. The 4MLD was adopted by the European Union in May 2015.
In 2016 financial Fraud cost the UK economy £2 million a day and the 4MLD aims to strengthen the EU and UK’s approach to combating financial crime and terrorism funding.
There was also a need for the enhancement of the EU’s Financial Intelligence Unit (FIU) to provide scrutiny of banks and payment service providers accounts data.
The overall implementation of the 4MLD requires a review of all processes and controls including extra Customer Due Diligence and a more risk based approach to Anti-Money Laundering.
Firms are now required to produce a documented risk assessment which has to include the firm’s;
- Customers/underlying beneficial owners
- Products and services
- Delivery Channels
There is a national risk assessment which has been produced to assist firms in producing their risk assessment which can be found here
The 4MLD has also increased the amount of information needed along with the previous requirements of the Money Laundering Regulations 2007 when dealing with and carrying out Customer Due Diligence on corporate bodies. The additional documentation required is now:
- The principal business address if different to the registered office
- The law which the corporate body is subject to, under the memorandum of association and any other governing documents
- The names of the board of directors and its senior management.
Much of this information can be found on the Companies House website as well as other company information platform websites.