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New risk-based guidance to combat money laundering and financing of terrorism published for the fina

The Joint Money Laundering Steering Group (JMLSG) today publishes new guidance on the prevention of money laundering and the financing of terrorism for the financial services industry.

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 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
  • provide additional guidance, tailored to particular business areas, to take account of special features in a number of sectors

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. This transitional period will allow firms to implement changes in procedures, although some firms may do so more quickly. Firms should start planning now for the introduction of the new guidance, and not wait for Ministerial approval.

The guidance is available free on the this website (please see below) in pdf format. There will shortly be available a web-based version, which will allow

  • easier and quicker access by users
  • quicker updating of the guidance
  • targeted and easier cross-referencing

Ian Mullen, the chairman of the JMLSG, said:

"We have taken a radical approach. The new guidance reflects the reality that most customers are neither money launderers nor terrorists. The guidance allows firms to counter money laundering and terrorist financing in a more proportionate, risk-based way, making better use of modern technology. The new guidance has been subject to public consultation, and to further detailed discussion across a broad section of the industry, and with government, regulators and law enforcement."

For further information, please contact:
David Swanney, JMLSG (020 7216 8830 )

Notes to Editors:

  • The Joint Money Laundering Steering Group ("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. This is primarily achieved by the publication of industry guidance.
  • The guidance published today takes account of the FSA's recent announcement of its decision to delete its Money Laundering Sourcebook.
  • JMLSG will be holding conferences in the Spring to give the industry the opportunity to discuss the guidance. Dates will be advised shortly on the JMLSG website.
  • During the formal consultation process JMLSG received over 100 responses, from both public and private sectors. A feedback statement, showing the JMLSG response to the comments submitted.
  • JMLSG comprises:
    Association of British Insurers (ABI)
    Association of Foreign Banks (AFB)
    Association of Friendly Societies (AFS)
    Association of Independent Financial Advisers (AIFA)
    Association of Private Client Investment Managers and Stockbrokers (APCIMS)
    British Bankers' Association (BBA)
    British Venture Capital Association (BVCA)
    Building Societies Association (BSA)
    Council of Mortgage Lenders (CML)
    Electronic Money Association (EMA)
    Finance & Leasing Association (FLA)
    Futures and Options Association (FOA)
    Investment Management Association (IMA)
    London Investment Banking Association (LIBA)
    PEP & ISA Managers' Association (PIMA)
    Wholesale Market Brokers' Association (WMBA)
  • JMLSG has published guidance on preventing money laundering since the early 1990s. The basic Guidance Notes have gone through a number of revisions and updates.
  • The review process was overseen by an Editorial Panel, chaired by Martin Hall, Director General of the Finance & Leasing Association (FLA), and comprising:
    David Allmand (on behalf of LIBA, FOA, BVCA, WMBA)
    David Broadway (on behalf of IMA, PIMA)
    Stephen Foster/Ian Wickens (on behalf of BBA, BSA, CML, AFS, EMA)
    Malcolm Rawlins (on behalf of AFB)
    Chris Hannant/Angus Halton (on behalf of ABI)
    Paul Whittaker/Louise Ellis (on behalf of APCIMS, AIFA)
    David Swanney, who drafted and edited the guidance

 
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