the changes proposed in the recently released UK JMLSG consultation for Part III of the Guidance Notes illustrate why regulation is frequently bought in to comply with yesteday’s crises and problems. The consultative document aims to bring the UK further in line with the FATF 40+9 recommendations and plug gaps identified in its last review by the IMF.
Specifically the revised version looks at
- wire transfers,
- equivalent jurisdictions and markets,
- sanctions, and
- proliferation financing.
Just looking at the revised section on equivalence is enough to leave a CO or MLRO in a state of advanced despair.
As much as the title of the document leads one to believe it’s meant to guide the reader you shouldn’t beat yourself up if you felt more confused after reading it.
For example Greece is a FATF, EU member and should be deemed to be equivalent for CDD and is listed as such, however two pages later it is also listed as a country that is being monitored by the FATF for deficiencies in its AML / CFT Standards. There is a sense that the ball is being thrown back into the company’s court for making a judgment call on the information available to it – and ‘the guidance’ does identify how this is best done. Overwhelmingly though the revised guidance really serves to underline the importance that firms should aim to be ahead of the game.
Complying simply with the current rules isn’t going to be good enough to protect the firm going forward – identifying future trends, monitoring best practice and current popular opinion will ensure that a firm remains one step ahead.
What could be legal this year may be illegal next year. It wasn’t that long ago that in some European countries bribes were actually tax deductible, legitimate business expenses. Today this would be unimaginable given the global drive against corruption. To make the best of a hard situation firms should be looking to best practice for real guidance to remain ahead of the game and the fast moving tides of public opinion.
Further Information:
UK JMLSG Consultative Document on Part III of the JMLSG Guidance Notes – http://www.jmlsg.org.uk/bba/jsp/polopoly.jsp?d=754&a=17694
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