What’s changed in money laundering regulations?

Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR) were issued February 13, 2013 and come into force one year later.

The amendments impact a wide range of financial services entities. Reporting entities will need to update their policies and procedures, risk assessments, processes, systems, training programs and documentation.

Some of the changes for the following areas include:

• Customer Due Diligence (CDD): The amendments provide clarifications to the CDD provisions and define when and how CDD measures should be prescribed. The term “business relationship” is introduced to identify circumstances where CDD applies;
• Enhanced Due Diligence (EDD): The new regulations include keeping client information up to date and applying enhanced ongoing monitoring of business relationships to detect reportable transactions; and
• Beneficial ownerships: The adjustments include obtaining beneficial ownership information on trusts relating to trustees, beneficiaries and settlors. The term “reasonable measures” no longer applies when it comes to confirming beneficial ownership. Reportable entities must now obtain and confirm the prescribed information on beneficial ownership.

When beneficial ownership information can’t be obtained, the institution must ascertain the identity of the trust’s most senior managing officer and treat that customer as high risk. EDD measures then apply.

Read more: Money-laundering regulations get a facelift>