FIAU document provides guidance in relation to anti-money laundering legislation

The Finance Intelligence Analysis Unit has released guidance for banks, companies and any subject persons in relation to the recently introduced laws regarding the fourth Anti-Money Laundering Directive.

The document called Revised version of the FIAU Implementing Procedures Part I, is over 200 pages long and helps provide guidance in terms of the obligations persons would have when, for example, setting up a relationship with a client. Certain consultations have already taken place.

The FIAU announces the publication of a revised version of the Implementing Procedures Part I for consultation and is inviting all persons and entities subject to the Prevention of Money Laundering and Funding of Terrorism Regulations, private sector representative bodies, as well as supervisory and other competent authorities, to participate in this consultation process. The public consultation will close on 31 December.

The Implementing Procedures Part I have been drafted by the FIAU with the aim of guiding all those financial and gaming service providers as well as a number of professionals who qualify as subject persons under the PMLFTR in implementing their Anti-Money Laundering and Combatting the Financing of Terrorism obligations. These legally binding Implementing Procedures Part I have been revised and updated so as to reflect the legislative amendments which took place between December 2017 and January, following the transposition of the fourth Anti-Money Laundering Directive, and more importantly to provide more detailed and quali- tative AML/CFT guidance reflecting today's business realities and technological developments.

One of the principles is for subject persons or entities like banks, not to treat everyone the same when it comes to risk assessment, and for the entities to focus their resources where there is a high risk person involved. The risk based approach entails and provides detailed guidance on the carrying out of business risk assessments and customer risk assessments which are the basis for the application of a Risk Based Approach to AML/CFT obligations.

The document provides further clarification in terms of who is to be considered a Politically Exposed Person and the varying risks between the kinds of PEPs (for example mayors as opposed to ministers, etc.). The law obliges banks and subject persons to treat anyone with a prominent public function as a PEP.

It also focuses on customer due diligence and provides guidance in terms of flexibility through the use of new technology. Originally when dealing with non face-toface clients, this was considered high risk, but this document provides guidance in terms of how to minimise the risk given advancements in technology.

The document also provides information regarding ongoing monitoring, after a relationship with a client begins and its importance to ensure that clients are using accounts, for example, for the reasons they originally said they would use them for. As an example, technology can be adopted to help identify patterns and to help check if a person's activities with, for example a bank, are in line with what it is meant to be used for.

The document also provides guidance with regards to outsourcing and highlights that if a company outsources something to do with a client, the original company is still responsible for the relationship with said client and thus must conduct its own due diligence and assessment on the person or entity the work is outsourced to.

The aim of this chapter within the document is to provide subject persons with a clear understanding of what AML/CFT obligations may be outsourced, which AML/CFT obligations shall not be outsourced as well as how should such outsourcing arrangements take place including the procedures, way and manner in which this can be carried out.

The FIAU shall be organising a training session to present and explain the proposed amendments to subject persons which would also serve as a platform to provide feedback. The training sessions shall be held on 18 and 19 December.

Further information will be provided closer to the dates.