About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Industry Demands Clarity Over 5AML

Subscribe to our newsletter

With less than a month to go before the fifth EU anti-money-laundering (5AML) rule comes into force, serious concerns are being raised regarding the lack of direction from the UK Government – with no final regulation yet transposed into national law. In an open letter to the Chancellor of the Exchequer, SmartSearch CEO John Dobson this week urged the Treasury to publish the new regulations without delay.
The EU’s Fifth Money Laundering Directive (5MLD) came into force in July 2018 with an obligation on all Member States to transpose the Directive into domestic law by January 10, 2020. The new regulations will have a significant impact on Know Your Customer (KYC) and due diligence processes for firms across the financial and professional services sectors, including banks, law firms and accountancy practices. The UK government consulted on how it would go about meeting this obligation in April 2019 but the political turmoil since then, and the uncertainty over the UK’s
relationship with the EU, has caused the publication of final regulations to be held back.
“It is right that firms in affected sectors play a full part in tackling money laundering but it is important also to recognise that this places a significant burden on businesses. The government should get on with publishing the new rules so that firms know where they stand,” says Dobson. “Businesses can’t afford to wait – there is already a very short
timeframe between now and 10 January. They need to be taking action now to get ahead of the game and ensure they are fully compliant.”
EU lawmakers are also looking to up the pace on anti-money-laundering (AML) initiatives, with calls from the European Parliament and individual governments to set up an independent EU-wide body with direct powers
over lenders to combat money laundering. However, Finance Commissioner Valdis Dombrovskis dashed hopes for immediate legislative reform this week, saying that an Action Plan on money laundering would
only be expected around March 2020. “The 5th Money Laundering Directive is not yet fully in force but there is growing pressure on the European Commission to go further to combat the flow of dirty money. This underlines the need for the UK to get on with implementing 5MLD,” says Dobson. “If the EU is looking to take quick action, they could start by making electronic verification compulsory across all Member States. EV has been shown to be much more reliable than manual checks – and it is also considerably quicker and more cost- effective for firms to operate.”
With a Conservative Government now in power and a strong majority for Boris Johnson to execute his manifesto, the industry will be looking for strong leadership and rapid action from the new administration on this urgent issue.
Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: MiFID II trading technology requirements – what’s worked and what hasn’t?

The incredible breadth of coverage of Markets in Financial Instruments Directive II (MiFID II) always meant there were going to be workarounds. Now that the implementation deadline of January 3, 2018 has passed, how did the marketplace fare in its attempts to comply, where was it successful, and which areas still need work? Listen to...

BLOG

FCA and Turing Institute Collaborate on Synthetic Data to Advance AML Detection

The Financial Conduct Authority has published a research note from its synthetic data anti-money laundering project, an initiative that began in autumn 2024 and was developed with the Alan Turing Institute, Plenitude Consulting, and Napier AI to create a synthetic dataset for AML detection testing. The paper marks the culmination of that work to date...

EVENT

TEST Event page 1

Now in its 15th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

Alternative Trading Systems Directory 2010

The year since we launched our first edition of the A-Team Alternative Trading Directory has passed by in a flash (no pun intended). And while the rate of expansion of the alternative trading system sector may have slowed – even consolidated somewhat – in the more established centres, their onward march continues both in terms of credibility, and of uptake...