LexisNexis Risk Solutions says companies will struggle with upcoming 5MLD
Firms will struggle to implement the new requirements of upcoming Anti-Money Laundering Directive (5MLD), global data analytics company LexisNexis Risk Solutions suggests.
The analytics provider, sister to legal research company LexisNexis, published a new guide to help educate firms on how to respond to the changes which will be introduced as part of 5MLD coming into force on 10 January 2020.
The EU’s new legislation is clamping down on money laundering and terrorist financing, following events such as the Panama Papers leaks, the increased money laundering risks with cryptocurrencies and the changing nature and frequency of terrorist attacks.
“Underground financial crime networks are one of the most insidious threats we face today,” says LexisNexis Risk Solution’s director of financial crime and reputational risk, Michael Harris. “With such a broad financial landscape, criminals have more channels than ever to exploit and abuse, resulting in greater risks to society.
Particularly when it comes to cryptocurrencies, Harris highlights the lack of regulation and vulnerability surrounding these new transfer channels. “Until now,” he says, “digital currencies have been unchartered waters for regulators.Greater controls are welcome, and organisations need to take all necessary precautions to become compliant ahead of January.”
Harris confirms that further regulatory updates will “quickly follow” and predicts “we’re not done yet”.
The guide, which advises companies not to wait for further word from UK government, warns newly regulated virtual asset companies now classed as “obliged entities” by 5MLD to implement full AML and counter-terrorist financing controls to meet the new obligations.
It also talks about politically exposed persons (PEPs), beneficial owners, customer due diligence, prepaid cards and enhanced powers of financial intelligence units (FIUs).