July 12 2017
The EU’s Fourth Money Laundering Directive, implemented in the UK by the Money Laundering Regulations 2017 (MLR 2017), introduced a risk-based approach to tackling money laundering and terrorist financing. The FCA has now published guidance on one aspect of the new regime: dealing with the appropriate treatment of Politically Exposed Persons (PEPs) for anti-money laundering purposes. By way of recap, at the heart of the new risk-based approach is effective customer due diligence where different due diligence measures will be applied to different types of customers. The Regulations require that the highest risk scenarios receive enhanced customer due diligence (EDD) – such as when dealing with PEPs. One of the changes under the new regime was to introduce “domestic” as well as “overseas” PEPs into consideration.