The end of the UK's 'transition period' out of the European Union has had repercussions for some parts of the guidelines promulgated by the Joint Money-Laundering Steering Group.
The JMLSG guidelines interpret the UK's Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended. These oblige regulated firms to fight money laundering and terrorist finance.
Before HM Government changed legislation to take Brexit into account, certain provisions in the regulations were derived from the UK’s membership of the EU. There are still some references in the JMLSG’s guidelines that rely on the premise that the UK is a member of the EU; these are in turn based on the now-obsolete parts of the regulations and will be amended in due course.
Changes to the guidelines
A ‘third country’ is now defined as a country other than the UK, as opposed to a country outside the European Economic Area (EEA). EEA entities are therefore third-country entities for the purposes of AML.
Part III Section 1: The same level of information is to be provided by British payment-service providers (PSPs), regardless of whether funds are being transferred to or from EEA countries or any other third country. British PSPs should take into account relevant legislative changes, including The Money Laundering Regulations 2019, when ensuring that complete payer-and-payee information accompanies all outbound wire transfers and when detecting non-compliant incoming wire transfers.
Specific references to observing European Supervisory Authority (ESA) guidelines are no longer appropriate.
The end of the Brexit transition period has not in itself increased any inherent AML/CTF risks, according to the steering group. With regard to correspondent relationships involving the execution of payments, firms should take cognisance of the effectiveness of the AML/CTF regime of any third country when determining the extent of the EDD measures to apply to respondents in that country.