Joint Money Laundering Steering Group Consults on Proposed Revisions to Part I of the UK Financial Services Guidance

The Joint Money Laundering Steering Group has published and opened up for consultation its proposed revisions to Part I of its Guidance on the prevention of money laundering and the financing of terrorism for the UK financial services industry. The proposed revisions will align the JMLSG Guidance with the proposed Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, on which the Government recently consulted. The draft Regulations are intended to implement into UK laws the EU Fourth Money Laundering Directive and are due to take effect by June 26, 2017 at the same time as 4MLD.

A key change to note is the separation of the text on the risk-based approach and risk assessment obligation. The JMSLG is proposing the separation because of the introduction of a new obligation to carry out a risk assessment in the Regulations. Other changes include updates to the guidance on electronic verification to bring it in line with current market practice.

The proposed revisions are intended to be consistent with the proposed Guidelines on Risk Factors to be issued by the European Supervisory Authorities, which set out factors for financial institutions to consider when assessing money laundering and counter terrorist financing risks associated with individual business relationships or occasional transactions and the extent to which a firm's customer due diligence can be adjusted based on the risk identified. The proposed revisions to the JMSLG's Guidance are based on the draft Guidelines published in October 2015 with some anticipation of possible changes. The consultation closed on April 28, 2017.

View the proposed revisions to Part I of the JMLSG Guidance.

View the Government's consultation on transposing 4MLD and the draft Regulations.

View the proposed ESA Guidelines on Risk Factors.