The Central Bank published the Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector (the Guidelines) on 6 September 2019. The Guidelines replace the previous Guidelines which had been in place since 2012.
Speaking at the launch of the Guidelines, Director General for Financial Conduct Derville Rowland stated that firms today "must adopt a risk-based approach to fulfilling their obligations and ensure that their controls, policies and procedures are fit for purpose, up-to-date, tested, and kept under constant review and scrutiny".
The Guidelines follow a public consultation relating to draft guidelines which were issued in December 2018. The Guidelines set out the expectations of the Central Bank regarding the factors that firms should take into account when identifying, assessing and managing money laundering (ML) and terrorist financing (TF) risks. The Guidelines replace the Department of Justice guidelines, which had been in place since 2002.
Key features of the Guidelines include:
- Detailed guidance around the factors which should underpin and inform the risk-based approach;
- Greater focus on ongoing monitoring of customers and the approaches that might be taken;
- Emphasis on the principle that, while an account may be opened prior to CDD being completed, transactions may not be carried out by or on behalf of the customer or beneficial owner until CDD is complete;
- Alignment of customer contracts with Section 33(8)(a)-(b) of the CJA 2010 on discontinuance of customer relationships where there is incomplete CDD (along with a suggestion that customer consent to potential discontinuance be obtained at on-boarding stage);
- No lists of documentation that the Central Bank considers would satisfy CDD requirements – in applying a risk-based approach, firms are expected to maintain their own lists of acceptable documents and review such lists on an ongoing basis;
- Firms must allocate responsibility for the approval of PEP relationships and ensure that the approval of such relationships is conducted by individuals who are "appropriately skilled and empowered";
- All employees, directors and agents of a firm must be trained on the firm’s AML/CTF policy and training must be tailored to the specific roles carried out;
- Firms should ensure that there is some means of proving the effectiveness of the training (e.g. assessment/examination);
- Greater clarity on what good governance by senior management and boards in relation to AML/CTF should look like, including an obligation to ensure that the AML/CTF function is adequately and properly resourced.
The Guidelines should be read in conjunction with relevant legislation and with guidance issued by the European Supervisory Authorities, including the 'Risk Factor Guidelines' on simplified and enhanced due diligence and the factors which credit and financial institutions should consider when assessing ML/TF risk.