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JMLSG Publishes Anti-Money Laundering Guidance

by Robin Pilgrim, LawAndTax-News.com, London

09 February 2006

The UK's Joint Money Laundering Steering Group (JMLSG) earlier this month published new guidance on the prevention of money laundering and the financing of terrorism for the financial services industry.

The JMLSG comprises the leading UK trade associations in the financial services industry. Its aim is to promulgate good practice in countering money laundering and terrorism financing and to give practical assistance in interpreting the UK Money Laundering Regulations 2003 and money laundering aspects of the Proceeds of Crime Act 2002.

The revised JMLSG guidance will change the way that money laundering/terrorist financing risk is managed in the UK, affecting the way many firms operate and deal with customers.

The new guidance takes account of the FSA's recent announcement of its decision to delete its Money Laundering Sourcebook, and will enable the UK financial services industry to take a sharper, risk-based approach to the international fight against financial crime.

Placing individual firms' approach firmly on their senior management, it will:

  • Allow firms to focus their resources on the minority of customers who represent a higher risk;
  • Reduce the documentation needed to verify the identity of non-personal customers;
  • Simplify the document requirements by which most individuals have to 'prove' their identity;
  • Encourage wider use of electronic means of verification of identity;
  • Reduce unnecessary duplication of identity checks; and
  • Provide additional guidance, tailored to particular business areas, to take account of special features in a number of sectors.

The JMLSG has now submitted this industry guidance for approval by a Treasury Minister.

Firms are likely to have to follow the guidance within six months from such approval, leading the Group to recommend that businesses should start planning now for the introduction of the new guidance, and not wait for Ministerial approval.

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