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New Anti-Money Laundering legislation

 New Anti-Money Laundering legislation

There are a number of fraud and Anti-Money Laundering (AML) checks that finance providers currently make before they decide to lend to a customer. But any “high value” dealerships – classed as those which accept cash payments of over €15,000 (approx. £12,000) – are required to have in place their own AML processes and checks that go beyond the responsibilities staff have with collecting documentation from the customer.

A fourth version of the EU’s AML Directive is currently being transposed into UK law which must be implemented by all EU member states by 26 June 2017.  The new legislation will reduce this cash payment threshold to €10,000.  Therefore any dealerships which accept cash of approximately £8,000 or more will therefore need to register their business with HMRC for AML purposes (lenders authorised by the FCA typically register with the FCA), and have in place certain processes (see module 14 of the SAF training material).

The new legislation will also see UK-based Politically Exposed Persons (PEPs) subjected to closer AML scrutiny from lenders and high value dealers, bringing them in line with overseas PEPs. PEPs are defined as individuals whohave been entrusted with a prominent public function.

Beneficial owners – individuals who either hold over 25% share ownership of a company, 25% or more voting rights, or the ability to appoint or remove board members – are currently subject to enchanced checks by lenders and dealers. But as of 6 April 2016, all firms should be compiling a register of their beneficial owners (if relevant), and these details should be updated and submitted in their annual return to Companies House. In turn lenders and high value dealers can use the register to conduct checks on customers that require further checks, known as enhanced due diligence.  More information can be found here.

Changes to the AML legislation will be reflected in our 2017 SAF training material update.