- by Ian Finnie on 26/09/2016

The EU's 4th Directive on Anti-Money Laundering was published in June 2015 and succeeds the 3rd Directive of 2005.

The 4th Directive must be incorporated into national laws of Member States by June 2017 and obliged entities (financial institutions, accountants, tax advisers and so on) must comply with the Directive from that date as well.

Risk Based Approach

Obliged Entities must define the risk level of a customer before determining whether to conduct Standard Due Diligence (SDD) or Enhanced Due Diligence (EDD) for their customers.

Where the risk is deemed higher a new level of Due Diligence - Enhanced Due Diligence is required.

Enhanced Due Diligence

EDD needs to be applied to existing customer base.

Obliged Entities will be required to review their customer registers to ascertain if they need to apply Enhanced Due Diligence to any existing customers as PEPs under the new definition, as well as applying these measures to new customers at take-on stage.

Enhanced Due Diligence includes screening for...

• Politically Exposed Persons (PEPs)

• Sanctions Checks

• Adverse Media Checks

Obliged entities must be able to evidence the rationale behind the risk rating applied to each customer.

Politically Exposed Persons (PEPs)

An individual who is entrusted with a prominent public function.

A politically exposed person (PEP) is an individual who is or has been entrusted with a prominent public function.

Many PEPs hold positions of influence and as a result carry a greater risk, if their influence is abused for the purpose of money laundering, corruption or bribery.

Not only this, but any close business associates or family member of these people will also be deemed as being a risk and therefore could also be added to the PEP list.

As part of the 4TH Directive, the definition of PEPs will be extended to include domestic PEPs i.e. Irish residents in prominent public functions or in positions with organisations here in Ireland.

Beneficial Owners

MLD4 required that obliged entities continue to identify individuals holding over 25% of the shares of a Company and perform necessary Due Diligence checks.

Standard Due Diligence (SDD)

Your compliance requirements are covered by Vision-net

Obliged entities are already required to evidence that they have taken steps to identify, assess, understand, and mitigate AML risk.

Vision-net has developed products in conjunction with leading anti-money laundering solutions providers to make cost-effective, fully comprehensive Standard and Enhanced Due Diligence and Ultimate Beneficial Owner checks available.

• Disqualified Persons

• Personal Insolvency & Bankruptcy

• Registered Bad Debt Judgments

• Revenue Defaulters

• Company Directorships & Business Ownerships

For further information on Compliance under MLD4 please don't hesitate to get in touch with us on helpdesk@vision-net.ie or call our compliance specialists today on Tel:01 664 1111

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