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Money Laundering Regs

Money Laundering Regs or Money Laundering Regulations (MLR) are the rules, laws and procedures in place to prevent money laundering. Money laundering is the process by which criminals disguise illegally obtained funds as legitimate income. 


They do this by integrating illegal assets into the UK economy so it appears as though the money was earned legally.


The latest money laundering regulations came into force in July 2017 and implement the EU’s 4th Directive on Money Laundering. The next set of regulations are set to come into force in January 2020, implement the EU’s 5th Directive on Money Laundering. The key change with the 4th Directive was that regulated firms should adopt a more risk-based approach towards anti-money laundering. This particularly focuses on due diligence and Know Your Customer procedures, requiring businesses to use EU guidelines to determine the level of due diligence required based on risk analysis. The 5th Directive also brings in a number of changes, most notably bringing letting agents under money laundering regulations, and requiring all regulated firms to use electronic verification and identification for their Customer Due Diligence and KYC processes.


As part of this customer verification process, regulated businesses must identify and verify all clients and screen against sanctions, PEP, SIP and RSA lists. They must then perform Enhanced Customer Due Diligence on any matches. They should also ensure processes for ongoing monitoring are in place. 


The SmartSearch platform offers a complete AML solution, comprising initial checks, Sanction and PEP screening and ongoing monitoring.

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