I regularly visit Switzerland which, being such a lumpy little country, has a lot of weather – and many ways in which the weather can kill you (avalanches, mountain mists, tsunamis, etc.). (I know you won’t believe me about the tsunamis, but it’s true.) As a consequence, Swiss weather forecasts are very detailed, and as well as the usual indicators also feature a “fiabilité” rating – how reliable that forecast is. So if it’s all very settled and not too far in the future, and the forecaster is just about certain that that’s what’s going to happen, it will get a 90% fiabilité score. More changeable conditions will reduce the fiabilité, sometimes down to as low as 20%. This is very handy, as it tells you how much to trust what is being forecast.
She’s lost the AML plot, I hear you cry – but my point is this. Here in the UK we are currently in a strange limbo – and I’m not talking about Brexit and Mayhem. On 15 March 2017 (beware the Ides…) the UK government published draft new Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. MLD4 requires them to be in force by 26 June 2017. The prudent MLRO will of course have looked at the new Regs, going through them with a red pen to pick out those points at which in-house procedures will need to be altered to meet the new standard. But there’s many a slip ‘twixt cup and lip, as they say (“they” being the ancient Greeks), and I’m certainly not doing my own version of alterations (i.e. updating all my UK piggy books) until I see the final, approved, passed, signed, in-force Regs.
However, what I would really value is a fiabilité indicator for each major change. I think we can take it as read (95% fiabilité) that the PEP definition is going to extend to bring in domestic PEPs. But what about that rather troubling suggestion (in s28 of the draft Regs) that if it proves difficult to ascertain the beneficial ownership of a corporate client, it will be permissible to “treat the senior person responsible for managing the customer as its beneficial owner” as long as you have “exhausted all possible means of identifying the beneficial owner of the body corporate” and you “keep records of all the actions… taken to identify the beneficial owner”? How likely is that to come in? Personally I’m hoping for a negative fiabilité rating on that one, but we’ll have to wait and see.
And that’s my concern: waiting and seeing is not comfortable for MLROs, who by their nature are happiest with plans and details. In-house procedures cannot be changed overnight, and the more notice that can be given, the better.