Rules drawn up by the Joint Money Laundering Steering Group (JMLSG) will compliment the FSA’s current money laundering sourcebook and focus on minimalising risk to criminal penetration.
However, many believe businesses will need 18 months to fully comply with the new guidance and Huntswood has warned that many will not be ready within the six-month timetable currently set out.
Eurfron Jones, head of consulting at Huntswood, commented: “It’s clear firms have a tough six months ahead and that implementing the new regime will place burdens on firms’ systems and resources.”
Many of the changes are aimed at streamlining the process of identity checking by reducing the amounts of information required for someone to prove their identity and moving more areas onto an electronic basis.
The changes are also intended to shift scrutiny towards more ‘high-risk’ clients, such as those dealing in large amounts of cash or people from abroad without any history in the UK financial market, and place the emphasis of complying with risk management regulations on the shoulders of senior management.
Ian Mullen, chairman of JMLSG, believed the rules will make a significant difference. “We’ve taken a radical approach but the new guidance allows firms to counter money laundering and terrorist financing in a more proportionate, risk-based way, making better use of modern technology,” he said.
Eleanor Hughes, spokesperson for the FSA, emphasised it was important for firms to make sure they weren’t at risk. “Many of the FSA’s rules mimic UK law so these need to be followed. However, we’ve always said companies need to adopt the best practice for them to make sure they aren’t at risk in this area.”
