Keeping up with the Joneses, les Dubois and die Schmidts

I mentioned in my previous post that Guernsey is on the cusp, nay, the very brink of getting new AML legislation.  This represents the conclusion of their exercise to fall into line with the Fourth Money Laundering Directive (or as in line with it as Guernsey wants to be), as we did in the UK when we created the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.  History shows us that after the grand effort of transposing a money laundering directive into national legislation, the domestic AML supervisors should be able to relax for about a decade.  But this is no longer the case.

The first Money Laundering Directive was adopted in June 1991, MLD2 in December 2001, MLD3 in October 2005 (this was rather quick, in order to bring terrorist financing into the mix) and then MLD4 in June 2015.  But then someone found the accelerator pedal: MLD5 was published in draft form in July 2016 and adopted in July 2018, with a transposition deadline for EU Member States of 10 January 2020.  This is only 2½ years after the MLD4 transposition deadline of 26 June 2017.  And now we have MLD6 – which, admittedly, is more of a companion piece to MLD5 as it deals specifically with the criminalisation of money laundering rather than with the practice of anti-money laundering, but nonetheless it too has a transposition deadline that is worryingly close, at 3 December 2020.

I’m not saying for one moment that MLDs 5 and 6 don’t contain interesting developments and initiatives – there are some crackers in there (centralised register of bank accounts, anyone?) – but I am concerned about the speed at which things are changing.  With the best will in the world, is any Member State going to be able to write new AML legislation for the second time in three years and put it out to industry for comment and get any meaningful response, given that industry has only just dealt with the last lot?  Are sectoral AML supervisors going to be able to put out guidance in time, given that they’ve only just dealt with the last lot?  Are MLROs going to be able to convince their Boards and staff to implement yet another updated set of AML procedures, given that they’ve only just dealt with the last lot?  And is anyone going to believe that those tasked with writing these AML directives actually know what they’re doing, given that the shine seems to wear off a new directive with alarming haste?  If we keep changing our minds about the best way to tackle money laundering, we create nothing but confusion, disillusionment and exhaustion – and criminals can take full advantage.

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