The most sweeping update to AML legislation in the EU in a number of years is the introduction of the Fourth Money Laundering Directive (“4MLD”) brought into force on 26 June 2017. The Directive is intended to update policies/procedures and guidance to reflect how business is done in the world today and is intended to bring greater transparency and consistency across EU (and globally) in the AML measures employed.
NCM have introduced new AML templates and procedures to ensure full compliance with the new Directive. One of the main changes is that firms must now document their methodology around risk of money laundering in a written risk assessment which must be kept up to date and available to the FCA upon request. All firms must develop and maintain a written record of the risk profile assigned to each customer and firms must consider customer risks in the context of wider money laundering and terrorist financing risk. Also the 4MLD removes the automatic entitlement to apply simplified due diligence for specific customers and firms need to justify where it is applicable. In particular the old equivalence regime no longer applies.