FSA Publishes Progress Report On Anti-Money Laundering ID Verification

by Robin Pilgrim, LawAndTax-News.com, London

18 October 2004

The UK's Financial Services Authority (FSA) on Thursday issued a progress report on the discussions that it has been leading on ways to simplify the UK's customer identification verification regime for anti-money-laundering purposes.

The report reflects the conclusions drawn so far by the FSA's ID working group, which has representation from all major stakeholders including law enforcement, consumers and the industry.

According to the FSA, key issues raised in the report are being raised with the Joint Money Laundering Steering Group (JMLSG), which is redrafting its guidance notes and plans to issue a consultation draft by the end of this year.

These include:

• The need for increased reliance on a single identification document, following discussions in the group which indicated that the provision of a second document gives limited additional corroborative value;
• Recognition of the benefits of electronic verification via a credit reference agency. The group recognised that this could be especially useful for non-face-to-face customers;
• Greater reliance on ID checks done by other firms;
• The need for a more tailored approach for non-personal customers and wholesale business. The JMLSG is working with a group of principal wholesale and institutional trade associations to develop a revised regime.

Announcing the publication of the progress report, Philip Robinson, financial crime sector leader at the FSA, explained that:

"In April I issued a challenge to all stakeholders to join together to defuse the ID issue. This includes customers' apparent lack of support for the process and firms' concerns over cost."

He went on to add that:

"We believe that it is crucial to the effective fight against all crime, not just financial crime, that key anti-money laundering controls, such as verification of ID, have the support of industry and customers. To that end, the ID working group was established to involve all stakeholders in the ID process."

"Our discussions have shown a common commitment to achieve an ID regime that is effective and that all stakeholders can support. All agree that there are ways to streamline the regime without reducing its effectiveness."

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