Anti-money laundering (AML) firm SmartSearch has warned firms against ignoring European Union money laundering directives, following the UK’s departure from the EU at the start of the year.
The firm said that despite Brexit, the EU-wide money laundering directives have been written into UK law and still need to be adhered to. Otherwise, businesses will be exposed to enforcement action from the Financial Conduct Authority (FCA).
In addition, as part of the legislation governing the departure from the trading bloc, the UK government has stipulated that electronic verification should be used, enabling businesses to move away from manual, document-based checks.
John Dobson, CEO at SmartSearch, said switching to electronic verification was the best way for businesses to ensure compliance with all the latest legislation, in the UK and EU.
He said: “We’ve now had six EU Money Laundering Directives with the last one just published a few weeks ago. As a major global financial centre, the City of London will be compliant with these regulations, as they still want to do business with the EU, which means all regulated businesses need to be compliant.
“We may have left the EU on Dec 31, but have you checked the small print? Businesses still need to be up to date with that legislation or risk fines and enforcement action from the FCA. For any business, the best way to be compliant is by switching to electronic verification for onboarding new customers and we would urge all businesses to make that switch this year.”
Dobson said that the Brexit legislation has been amended recently to clarify the provision confirming that identity can be verified electronically, which is now UK law.
He added: “For some time now it’s been clear that documents are dead and that there is an alternative in electronic verification, which is quicker and more cost effective. It’s also less intrusive for you and your client, as well as being 100% Covid-secure because you don’t need to meet face-to-face. Faced with this third wave of coronavirus, businesses need to act fast to make the switch.
“The only way to be sure is to switch to 100% electronic verification. There is no longer any need to collect passports, driving licences and those kinds of documents to verify ID. We are entering a new era of EV, and this year is the year to make the switch.
“Only SmartSearch has the ability to verify individuals and companies in the UK, and internationally, in a single platform via a browser or API. It’s time to protect your business by doing a smartsearch, which means a fully automated electronic identity check that references multiple independent data sources to confirm multiple proofs of identity. It automatically screens the data subject against global sanction & PEP watch-lists compliant with the latest AML government regulations.”
