Delay in implementation of Third Money Laundering Directivewill be a challenge for designated bodies. Policy makers in this, as in any other area, must ensure that industry is fully informed of its obligations in sufficient time to allow industry to plan to meet its obligations. The Third Money Laundering Directive (Directive 2005/60/EC) and implementing measures (Directive 2006/70/EC) (the "Directive") are due to be implemented in Ireland on 15 December 2007. The Directive is designed to consolidate the existing regime and introduce new anti-money laundering and counter-terrorist financing requirements ("AML/CTF") across the European Union. The Department of Finance, along with the Department of Justice, have confirmed that the new legislation will not be published until mid to late January. We understand that there will be a period of consultation before the legislation is finalised which might not be until March next. Although the requirement to implement procedures to prevent and detect both money laundering and the financing of terrorism are not new, the Directive will introduce some important changes to that regime which will require careful planning from affected firms, (referred to in Irish legislation as "designated bodies"). It is important to note the Directive's requirement that the board of directors of each designated body must be able to demonstrate that they have "adequate and proportionate policies and procedures of customer due diligence, reporting, record keeping, internal control, risk assessment, risk management, compliance management and communication". It takes time to put these processes and procedures in place and the delayed implementation will no doubt be welcomed by designated bodies although it may lead to some confusion where for example, a designated body has clients in Member States that have implemented the Directive and as such are expecting the new regime to apply. Application of a risk based approach The Directive uses the terminology "Customer Due Diligence" ("CDD") which is the term used to describe the process whereby designated bodies form a reasonable belief as to the true identity of each customer, the type of business it is involved in and the transactions the customer is likely to make. Designated bodies will need to have processes and procedures in place which will collect a range of information sufficient to allow that firm to identify and verify each customer, take reasonable measures to identify and verify...
The Third Money Laundering Directive Implementation Likely To Be Delayed Until Spring
|Author:||Mr Joe Beashel|
|Profession:||Matheson Ormsby Prentice|
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