UK property market...target of slush funds
According to a new study almost eight in 10 of financial crime professionals in UK financial services believe that the 4th EU Anti-Money Laundering (AML) Directive will make it easier for firms to prevent money laundering a survey of nearly 200 professionals has revealed.
The Future Financial Crime Risk 2017 report, produced by LexisNexis Risk Solutions, global information solutions provider and part of RELX group, highlights that asset managers were especially positive about the advantages, with over 80 per cent agreeing it would aid the fight against financial crime.
The European Union’s Fourth Anti-Money Laundering Directive came into force on 26 June 2015. It requires European member states to update their respective money laundering laws and “transpose” the new requirements into local law by 26 June 2017.
Officials from HM Treasury have indicated that the UK legislation will likely be passed just in time for the deadline. The two laws that require an update are the Money Laundering Regulations and the Proceeds of Crime Act.
Under the Directive, corporates and other legal entities will be required to maintain accurate and current information on their beneficial ownership. They must provide that information to the government. The information on beneficial ownership will be held by each member state in a central register that will be accessible to banks, law firms and “any person or organisation that can demonstrate a legitimate interest”. These interconnected registers will contain the names, dates of birth, nationality, country of residence and the nature and extent of the beneficial owners’ interests in the transaction.
Of late, the United Kingdom property market has been the preferred target and conduit channel for illicit money traffickers from perceived corrupt nations like Nigeria, Venezuela and other developing countries. Illicit monies are usually ploughed into the lucrative UK property market in blind trust.
If the Directive is invoked, it will lead to massive exposure of the identities of big property owners in UK especially owners from developing nations.
According to a report published in London Love Business, the new survey marks a shift in attitude from when financial crime professionals were surveyed on the potential impact of the 4th EU AML Directive in 2015 as part of the inaugural Future Financial Crime Risks Report commissioned by LexisNexis Risk Solutions. Previously, only 17% of those surveyed believed that the regulation would significantly reduce money laundering whilst nearly a third (32 per cent) thought it would make no difference or increase levels of money laundering.
Today the Money Laundering Regulations 2017 (which is also known as Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017) come into force which transpose the 4th EU AML Directive into UK law. To support this, the Joint Money Laundering Steering Group (JMLSG) has released revised guidance within which they advise firms to adopt a risk based approach to customer due diligence.
