The main changes are:
- more emphasis on senior management responsibility
- the implementation of a risk-based approach to money laundering prevention
- revised approach to customer identification, including acknowledgment of electronic methods
- introduction of specific industry sector guidance.
Beverley Dewhirst, Callcredit’s head of compliance, commented:
“The JMLSG has been producing money laundering guidance notes for the financial sector since 1990 and the guidance has been updated on a regular basis to reflect the changing world and developing good practice.
“The guidance notes have improved dramatically over the years and have led to a greater industry awareness of money laundering (ML) risk and the steps that must be taken to combat it. There is growing recognition that simply ticking boxes is not the right approach to compliance and businesses are now putting real thought into their ML risk policies.
“This is further encouraged in the new guidance notes, which allow for different compliance solutions for different sectors rather than one size fits all. There is now a clear acceptance that not every customer and every financial transaction carries the same risk of being associated with money laundering. Therefore customer verification processes should be risk-based and take into account various factors such as the type of financial product, method of access and personal circumstances.
“The aim has to be to catch the real money launderers whilst ensuring that most people have a good customer experience when conducting their normal business.
“The new guidelines reinforce the need for transparency and clear explanations of how decisions are reached.
“The format of the guidance notes shows a clear reference to the relevant piece of the legislation. This ensures that your ML legal obligation is clearer although it cannot be used solely to assure compliance with the law.
“Moving to a single document check in lower risk circumstances and fuller use of electronic verification services means that no customers should be excluded and businesses should find meeting their ML obligations less burdensome.
“The notes will lead to a clearer understanding of electronic verification and what level of checks is acceptable. They will also help to guide companies in the right direction as to the type of electronic verification services they should be looking for."
