Cleaning up money laundering regulations
Changes to the money laundering rules will match more closely the obligations of businesses to the risks involved.
The new regulations, which take effect on 15 December 2007, will require businesses covered by the requirements to undertake ongoing monitoring and to identify the beneficial owner of the customer entity. They will also have to make sure staff are adequately trained to deal with suspect transactions. However, businesses will now be able to vary the number of checks according to the level of risk. For example, child trust fund administration is low risk so fewer checks will be needed.
A welcome new feature is that businesses will be able to rely on identity checks made by other firms, such as where a solicitor refers a client. In contrast there will be enhanced checks where a client is not physically present since this poses a higher risk.
Money service businesses, such as bureaux de change, will have to re-register with HM Revenue & Customs (HMRC) by 1 February 2008 and their principals will be subject to a ‘fit and proper’ test. Trust and company service providers will come under HMRC supervision from 15 December 2007, and existing businesses will have to register by 1 April 2008. Such businesses will also be subject to the ‘fit and proper’ test, and new businesses will have to pass the test before they can start trading.