Are you ready for 5MLD? The 5th Money Laundering Directive was introduced as part of ‘The Money Laundering and Terrorist Financing Regulations 2019′, and is effective from January 10, 2020. A key change from the previous regulation is new wording which states that wherever possible, businesses must use electronic verification for their anti-money laundering checks, rather than just looking at paper-based documents such as passports and driving licenses. Any financial or professional firms who do not already have a trusted means of electronic KYC will need to implement this immediately to ensure they are compliant and save themselves from a heavy fine of up to a maximum of €5 million or 10% of annual turnover, or a complete block on trading. Other key changes in 5MLD include stricter controls on e-money, a clampdown on cryptocurrency regulation, public access to beneficial ownership information, better access to information for Financial Intelligence Units (including access to centralized national registers), and increased due diligence in high risk countries. If you are an MLRO and haven’t done so already, you should carry out a risk assessment and gap analysis to identify any potential control weaknesses. Please approach me if you need to discuss this further.

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Ayaz Siddiqui, 8th January 2020

GRT Consulting

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