AML/CFT Requirements and Guidance

May 2020: Removal of the country lists A, B, C and D, instead a link has provided to these lists on the Department of Home Affairs website where they will be maintained going forward.

June 2020: Clarification added to section 7.2.7 regarding the recording of a section 18 request made under the Financial Intelligence Unit Act 2016.

Appendix A(a) has been amended in “tracked changes” to reflect the amendments made to the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019. Appendix A(b) is the “clean” version of the document.

Appendix D(a) and Appendix D(b) have been amended to reflect the FATF statement issued on 18 October 2019 and the FATF’s statement entitled ‘Improving Global AML/CFT Compliance: update on on-going process’ also issued on 18 October 2019.

Replacement guidance documents have been issued to cover the period whilst the Handbook is being updated in full to reflect the amendments brought in by the AML/CFT Code 2019. The documents issued are:

• Part 4 “Customer Due Diligence”, this replaces the existing part 4 of the Handbook;
• Introduced Business, this replaces section 3.3A of the Handbook;
• Source of funds and source of wealth, this replaces section 4.14 of the Handbook; and
• Generic designated business, this replaces section 6.8 of the AML/CFT Handbook.

Sector specific guidance notes for Authorised insurers (Non-life), Registered Insurance Managers and Registered Insurance Intermediaries (General Business) and sector specific guidance notes for Investment Business have been published.

Appendix C (Equivalent Jurisdiction List) has been updated, including a revised methodology. It should be noted that it is now Cabinet Office who are responsible for the maintenance of this List.

Within the main body of the Handbook the definition of politically exposed person has been updated to reflect the changes made in the AML/CFT Code that came into force on 1 June 2019. Appendix D(a) and Appendix D(b) have been amended to reflect the FATF statement issued on 21 June 2019 and the FATF’s statement entitled ‘Improving Global AML/CFT Compliance: update on on-going process’ also issued on 21 June 2019.

Appendix A and Appendix B have been amended to reflect the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 and the Proceeds of Crime (Business in the Regulated Sector) Order 2019.

Appendix D(a) and Appendix D(b) have been amended to reflect the FATF Statement issued on 22 February 2019 and the FATF’s statement entitled ‘Improving Global AML/CFT Compliance: update on-going process’ also issued on 22 February 2019.

Throughout the Handbook references to the FSC/IPA/FIU/ECU have been updated.

Throughout the Handbook references to ‘face to face’ have been amended to ‘met’.

Section 1.2 has been updated with reference to section 157 of the Proceeds of Crime Act 2008.

Section 1.5 has been updated to reflect that jurisdictions are assessed against the FATF requirements.

Section 1.6 has been updated to reflect that breaches of the sanctions list should be reported to the FIU.

Section 2.1 has been updated to reflect that procedures are required for sanctions screening and wording has been added regarding the fact that responsibility for compliance with the Code always remains with the relevant person.

Section 3.1.2 has been updated to reflect that considered of whether a relevant person usually meets customers and the requirements of paragraph 15(5) of the Code need to be considered in the Business Risk Assessment.

Section 3.3 has been updated to reflect the requirements of paragraph 10A of the Code, and that the requirements of paragraph 15(5) of the Code must be considered in the Customer Risk Assessment.

Section 3.3A has been added regarding the new requirements of paragraph 10A of the Code.

Section 3.3.5 has been updated to differentiate between introduced business and use of the Eligible Introducer concession.

Section 3.3.6 has been updated added regarding meeting the customer.

Section 3.4.1 has been updated with wording regarding scrutiny of sanctions lists.

Section 3.4.2 has been updated with wording regarding sanctions lists, the location of the customer or business activity and whether the customer has now been met.

Section 4.3.4 has been updated with wording regarding who has control of a relationship.

Section 4.4.1 has been updated with wording regarding the fact that paragraph 11 of the Code applies where new requirements have been added to the Code.

The concessions table in section 6.1 has been updated.

Section 6.2 has been updated to remove references to non-eligible introducers throughout.

Section 6.2.2 has been updated with wording regarding taking steps to ensure the customer is acting on its own behalf, identifying source of funds, the requirements of paragraph 5A of the Code, the need to consider the suitability of CDD being undertaken by the Eligible Introducer.

Section 6.2.3 has been updated with wording regarding what must be done if the conditions of the concession aren’t complied with. The entirety of section 6.4 has been updated to reflect the changes in the Code regarding the Acting on Behalf of concession.

Section 7.3.5 has been updated with wording from Customs and Excise.

The glossary has been updated.

Appendix B has been updated to reflect the Proceeds of Crime (Business in the Regulated Sector) Order 2015.

Appendix D(a) and Appendix D(b) have been amended to reflect the FATF Statement issued on 19 October 2018 and the FATF’s statement entitled ‘Improving Global AML/CFT Compliance: update on-going process’ also issued on 19 October 2018.

Appendices E, G and J have been updated in line with changes in the Amendment Code.

Section 4.9 of the AML/CFT Handbook has been amended to state that a relevant person may consider obtaining sight of the letter of wishes, or other relevant documents of the trust, to confirm the beneficiaries / potential beneficiaries to the trust.

Appendix D(a) and Appendix D(b) have been amended to reflect the FATF Statement issued on 29 June 2018 and the FATF’s statement entitled ‘Improving Global AML/CFT Compliance: update on-going process’ also issued on 29 June 2018.

Section 6.2.5, under the sub-heading “where the conditions detailed under 6.2.2 have not been met” a reference to the FSRB has been corrected from rule 8.14 to read rule 8.17.

Section 6.7.3 a typographical error in this paragraph has been corrected, “Jurisdiction” has been changed to “activities”.

Part 7 has been updated to reflect an amendment to reporting in relation to financial sanctions.

Appendix D(a) and Appendix D(b) have been amended to reflect the FATF Statement issued on 23 February 2018 and the FATF’s statement entitled ‘Improving Global AML/CFT Compliance: update on-going process’ also issued on 23 February 2018.

January 2018

Section 3.3.1 ‘Lower risk’ has been updated to provide clarity around use of the classification.

Section 1.1 ‘Foreword’ has been updated to clarify that references to Money Laundering and Terrorist Financing also include proliferation.

Section 1.6 ‘Compliance Culture’ has been updated to clarify where the term ‘customer’ is used relevant persons should consider that this also refers to the ‘beneficial owner’.

Section 3.1 ‘Business Risk Assessment’ has amended to reflect that the key areas of a business risk assessment are specified in the Code.

Section 3.1.1 ‘The nature, scale and complexity of its activities’ has been updated to reflect that the findings of the NRA should be considered.

Sections 3.1.4 and 3.3.5 ‘The reliance which is placed on any third parties for elements of the CDD collected’ have been amended. Relevant persons should consider the extent of information being provided by the third party and who has actually met the customer face-to-face.

Section 3.3 ‘Customer Risk Assessment’ has been amended to provide clarification regarding customer risk assessments.

Section 4.3.4 ‘Beneficial ownership and control’ has been updated to reflect that the definition of Beneficial Owner in the Code is different to the definition in the Beneficial Ownership Act 2017.

Section 4.3.5 ‘Politically Exposed Persons’ has been consolidated into section 4.16 and has been expended to provide further information.

Section 4.16 ‘Politically Exposed Persons (PEPs)’ has been expanded to provide further information regarding identifying PEPs and PEP risk.

Section 7.3.5 ‘What are international sanctions?’ has an updated title and has been expanded to provide further information.

Section 8.5 ‘Registers’ has been amended to confirm that registers can be contained in a single document.

Appendix D(a) and D(b) have been updated to take account of the FATF’s latest statements published on 3 November 2017.

Appendix H has been amended in line with the new wire transfer regulations.

A new appendix, Appendix L, has been added. This appendix provides information on terrorist financing and typologies.

The sector specific guidance for Specified Non-Profit Organisations has been amended to reflect the information in Appendix L.

April 2017: Appendix D(a) and D(b) have been updated to take account of the FATF's latest Statements published on 24 February 2017

Appendix D(a) and D(b) have been updated to take account of the FATF's latest Statements published on 21 October 2016.

Section 7.6.3 "Making an external disclosure" has been updated to reflect recent changes to the Isle of Man Financial Intelligence Unit and the creation of an online reporting system.

Any references in the AML/CFT Handbook to the Financial Crime Unit have been changed to the Financial Intelligence Unit ("FIU").

There have been some minor terminology amendments made throughout the document to ensure accuracy and consistency. Also, any remaining references to 'Commission' have been replaced with 'Authority'. There have also been a small number of other changes made to the document. A document setting out other changes can be found here.

Also, Appendices D(a) and D(b) have been updated to take account of the FATF's latest Statements published on 19 February 2016.

Appendix D(a) and D(b) have been updated to take account of the FATF's latest Statements published on 23 October 2015.

AML/CFT handbook and associated sector specific guidance also updated to reflect the creation of the Financial Services Authority.

A document setting out other changes can be found here