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Anti-money laundering legislation guidelines issued by FIAU

The Financial Intelligence Analysis Unit (FIAU) has released a revised version of the Implementing Procedures (Part 1) for consultation. The document offers guidance subject persons such as banks, company service providers, trustees and real estate agents to implement the necessary obligations in relation to the Anti-Money laundering and Counter Financing of terrorism (AML/CFT) laws introduced earlier this year.

The covered obligations include the risk-based approach, customer due diligence measures, ongoing monitoring obligations and record-keeping measures. The guidelines draw from a number of ongoing consultations that have taken place over the last few months, and which will come to a close on 31 December.

The guidelines aim to guide 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 (AML/CFT) 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 2018, following the transposition of the 4th Anti-Money Laundering Directive (4AMLD), and more importantly, to provide more detailed and qualitative AML/CFT guidance reflecting today's business realities and technological developments.

One of the principles being emphasised on is for subject persons to adequately assess risks. As a result, the document focuses on the risk-based approach and it provides detailed guidance on how one is to carry out the business and customer risk assessments - which are the basis for the application of a risk-based approach. The risk-based approach will also aid subject persons to focus their resources in case of a high-risk person or situation.

The AML/CFT law obliges subject persons to treat individuals holding a prominent public function as Politically Exposed Persons (PEP). In view of this, the revised Implementing Procedures provide clarifications in terms of who is to be considered as a PEP and the different levels of risk in terms of the positions held by PEPs (for example, Mayors as opposed to Ministers).

The document also indicates the measures that need to be implemented in terms of customer due diligence and ongoing monitoring. The use of new technology is now permitted, and the document provides for certain criteria when such technology is used by the subject persons.

Guidance with regards to outsourcing is also included in the revised document. The Implementing Procedures outlines that if a company outsources the AML and CFT processes to a third party, the original company is ultimately responsible for the AML/CFT obligations. Furthermore, the document contains guidelines to provide subject persons with a clear understanding of what AML/CFT obligations may be outsourced, which AML/CFT obligations cannot 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 consultation process is open until Monday 31st December 2018. The full document of the amended Implementing Procedures Part I and further information on this consultation process may be accessed from the FIAU's website.