Proposed Amendments to the Implementing Procedures – Part I


Proposed Amendments to the Implementing Procedures – Part I

March 10, 2021

10th March 2021

The Financial Intelligence Analysis Unit (“FIAU”) is today issuing a Consultation Document setting out proposals for a number of changes to the Implementing Procedures – Part I.  Some of these changes have already been the subject of informal consultation exercises and the FIAU is considering the feedback received so far to assess whether there is the need for any revisions to be made to the text.  Others reflect positions agreed to with sectoral representative bodies.

However, there are a number of changes which are being set out for the first time and which address concerns and issues that have been arising from time to time.  These include the following:

  1. Adverse media is one of the aspects that has to be taken into consideration by subject persons when carrying out the Customer Risk Assessment.  Given that the relevance and reliability of adverse media will depend on a number of criteria, additional guidance is being provided in Section 3.5.1(a)(a) as to how to assess the same.  The said guidance is also intended to assist subject persons when it comes to the evaluation of supervisory and regulatory information within the context of Simplified Due Diligence.
  2. Additional guidance is also being provided with respect to on-going monitoring.  Amendments are being proposed which are intended to clarify the position of subject persons like investment fund managers [Section] while additional guidance is being included on the on-going monitoring requirements applicable where a subject person determines that Simplified Due Diligence can be applied [Section].
  3. A series of changes are being proposed to Chapter 5 in an effort to address repeated issues that are arising when it comes to the appointment of the Money Laundering Reporting Officer (“MLRO”).  Some of the more significant changes are:
  • The removal of the prohibition on non-executive directors to act as MLROs;
  • The considerations which should be taken into account when a subject person locates its MLRO abroad;
  • A more detailed explanation of which situations may present a conflict of interest and the introduction of an element of proportionality, allowing for the taking of mitigating measures rather than the outright refusal or removal of the (proposed) MLRO;  and
  • The removal of the restriction on the number of Designated Employees that can be appointed by each subject person.

The FIAU hopes that these changes will provide the necessary flexibility to subject persons while still ensuring that whoever is acting as MLRO is able to fulfil the duties associated with this role in an effective and timely manner.

4. Section 8.1.2 is also being amended to provide more guidance on the carrying out of the jurisdictional risk assessment.  Criteria are being set out which, if met, will allow a subject person to rely on assessments carried out by third parties.  In addition, examples of particular services are being provided setting out which links to jurisdictions would need to be taken into consideration for the purposes of carrying out a jurisdictional risk assessment.

The members of the Joint Committee for the Prevention of Money Laundering and Funding of Terrorism which represent the various subject persons, all supervisory and other competent authorities, as well as other interested parties are invited to provide their feedback through written submissions on the proposed amendments to the Implementing Procedures Part I by not later than Friday 9th April, 2021.

Written submissions are to be provided via electronic mail on [email protected].