On September 5, 2023, the UK Financial Conduct Authority (FCA) published the terms for its review of the treatment of domestic Politically Exposed Persons (PEPs) by financial services firms. This review is being conducted in compliance with Section 78 of the Financial Services and Markets Act 2023. The FCA’s review will carefully examine the arrangements of firms dealing with PEPs based in the UK and is set to deliver its report by the end of June 2024.
The review will consider the following notable aspects:
- Implementation of the definition of PEPs by firms for individuals.
- Conducting risk assessments for UK PEPs, their family members, and known close associates.
- Effective application of enhanced due diligence and ongoing monitoring in alignment with risk.
- Grounds for rejecting or closing accounts for PEPs, their family members, and known close associates.
- Ensuring effective communication with PEP customers.
- Reviewing PEP controls to ensure their effectiveness and suitability.
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On May 30, 2024, the European Union Council published a package of legislative proposals to strengthen the EU’s rules on anti-money laundering and countering the financing of terrorism (AML/CFT).
The EU AML Package consists of:
• Sixth Anti-Money Laundering Directive:
• Organizes national authorities to combat money laundering and terrorism financing.
• Creates Centralized Bank Account Registers for single access point data
• Harmonizes the format of bank statements for better tracing and confiscating crime proceeds.
• EU "Single Rulebook" Regulation:
• Harmonizes anti-money laundering rules across the EU.
• Includes new entities like crypto-sector, luxury goods traders, football clubs, and agents.
• Sets EUR 10,000 limit on cash payments
• Imposes stricter due diligence standards and regulates disclosure of beneficial ownership.
• Anti-Money Laundering Authority:
• Based in Frankfurt, it will have supervisory powers over...