I know I said last time that I wouldn’t be doing anything until the UK’s new Money Laundering Regulations 2017 and their attendant guidance notes are finalised and approved (we’re working towards 26 June 2017), but that doesn’t stop me having a think about them. And one change they have brought in (or – more correctly – are proposing bringing in) concerns record-keeping. I know: yawn-o-rama. But still, important to those of you tasked with designing and implementing in-house record-keeping procedures.
In the olden days of the Third Money Laundering Directive (written on vellum by monks, you may recall), the distinction was drawn between KYC records (yes, way back before CDD was born) and transaction records. The former had to be kept for at least five years from the date of the end of the business relationship, and the latter for at least five years from the date of the completion of the transaction. But this time round – see Article 40 of the Fourth Money Laundering Directive – the line has moved. Now the two categories are: CDD and transaction records relating to business relationships; and transaction records relating to occasional transactions. For the former, it’s five years from the end of the business relationship, and for the latter, five years from the completion of the transaction. You may need a Venn diagram at this point, but the category affected is transaction records associated with a business relationship – which must now be kept for much longer. You can no longer bin them once the transaction itself is five years old, but must wait until the client has been gone for five years. (Gone from you, I mean: not departed this life. That’s probably coming in the sixth directive.)
I did warn you: dull but important. (And I’m as certain as I can be that we can count on this change, as it’s MLD4-driven, not a UK localisation.)