Susan Grossey: Thoroughly modern piggies

Susan has been making her living from crime for over twenty years.  She provides anti-money laundering training and advice to the regulated community in the UK, Guernsey, Jersey, the Isle of Man and Gibraltar, and writes and talks on the subject at every opportunity.  As her hobby she writes historical novels—about financial crime.

So tell me: what did you do this weekend?  Sit in the garden?  Sail to France?  Slap a few prawns on the barbie?  I did none of these: instead, I sat at my desk, surrounded by the new Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, wielding a red pen, and updated five piggy books.

But let’s start at the beginning. On Friday I was minding my own business, writing an article, when an email came in announcing that HMT had put out a press release about the new Regs.  “Crack down on terrorist and criminal financing”, said the headline. “Terrorists and criminals will find it harder to move money through the UK financial system thanks to new rules coming into force on 26^th July 2017.”  I did a double-take: July?  Had we missed the deadline by exactly a month?  Was it normal to bring out new Regs on a Wednesday?  Or was it a misprint?  I called everyone I could think of at HMT – barring Gladstone, the Treasury cat, who never gives much away – and eventually tweeted them.  After an exciting hour, it was confirmed that it was indeed a typo, and that we were all systems go for the MLD4-sanctioned deadline of 26 June.

As for the major changes, well, I don’t want to spoil your fun as you hunt for them yourselves, but there’s a lot about risk assessment (the government must do a national risk assessment, supervisory bodies must do sectoral risk assessments, and firms’ in-house risk assessments must take these external ones into account).  “Where appropriate with regard to the size and nature of the business” you must: appoint a Board member or similar senior person to be responsible for AML/CFT compliance (and give their name to your regulator); and establish an internal audit function to check your AML/CFT efforts.  If you can’t identify a beneficial owner, you must keep records of all your attempts to do so – I’m really not happy with this one.  There’s plenty of information about EDD – when it must and could be applied, what it must and might entail, etc.   And then there’s that change to record-keeping that I highlighted before, with one small alteration: if you’re looking at transaction records in the context of a client relationship, you must keep them for ten years, or for five years after the end of the relationship, whichever comes first.

The piggies, as I say, are all updated and raring to go – forgive the plug, but now that I’ve spent a whole weekend force-feeding them the new Regs, I want to see them flourish.  Thanks to the magic of print-on-demand publishing, there are no piles of old stock lying around – in a rather fairytale way, no piggy exists until someone orders him.  The link to the updated piggy for UK NEDs can be found here, and the updated four piggies for staff in the UK regulated sector (accountancy, banking, insurance and investment versions) can be found here.

This piece first appeared on Susan’s blog, I hate money laundering.