The Joint Money Laundering Steering Group (JMLSG) has revised its guidance which firms can use to assess whether non-EEA States have an anti-money laundering regime that is equivalent to the Third Money Laundering Directive (TMLD).
The TMLD sets out (articles 6 - 9) the obligation on firms to carry out specific customer due diligence measures (CDD). Article 11 of the TMLD allows firms to carry out simplified due diligence (SDD) in respect of other firms that are subject to the TMLD, and to rely on (article 16) other firms that are subject to the requirements of the TMLD to carry out CDD measures on their behalf. The TMLD extends these derogations to firms in third countries, in jurisdictions where the firms are subject to legal obligations that are equivalent to those in the TMLD.
The TMLD was implemented in the UK through the Money Laundering Regulations 2007 (MLR 2007). Regulation 13 of the MLR 2007 provides that firms may apply SDD where the customer is a credit or financial institution which is subject to the TMLD, or is situated in a non-EEA State that imposes requirements that are equivalent to the TMLD. Regulation 17 of the MLR 2007 also permits reliance on firms that carry on business in a non-EEA State that are subject to requirements that are equivalent to those in the TMLD, to carry out CDD on the relying firm’s behalf.
Non-EEA States that meet the requirements in Regulations 13 and 17 of the MLR 2007 are defined as “equivalent jurisdictions”. It is up to UK firms themselves to determine whether a particular jurisdiction is equivalent. The guidance produced by the JMLSG helps firms make that determination.
View JMLSG revised guidance on equivalent jurisdictions, 11 August 200