Counter Terrorist Financing - Meeting the 4th EU AML Directive
The European Union has taken its fight against acts of terrorism to a new level by expanding its money laundering and terrorist financial prevention act. This act which is called the European Union Fourth Anti-Money Laundering Directive (4th AML directive), replaces the 3rdanti-money laundering directiveand is regarded as the most sweeping of such directives in recent times.
The major highlights of this new directive include among other things:
1. The lowering of cash payment threshold to €10,000
2. An expanded definition of who a politically exposed person is.
3. An increased emphasis on ultimate beneficial ownership and a more extensive customer due diligence.
4. Expanded to now cover not just casinos but the entire gambling industry.
5. An enhanced risk based approach that requires evidence based measures.
This new directive is applicable to different business without regard to type and size so long as they are conducting transactions that qualify them as what is called “obliged entities”. This covers different businesses from banks to currency exchanges, stores, gaming companies, lawyers, notaries, real estate agencies and others.
This new directive which had an implementation deadline of June 2017 has put business on notice regarding steps they must take to ensure they meet these new directives aimed at tightening the noose around money laundering and counter terrorist financing.
With this directive, each business must know their customers very well using enhanced customer due diligence procedures. Important questions that businesses must now ask include:
1. Where is the fund coming from?
2. What is the reason for the transaction?
3. Who exactly is doing this transaction?
4. Who is at the receiving end of the transaction?
There is no doubt that this new directive is a curve ball that businesses must find a way to update so they can meet them. Being able to meet these directives require that a reliable system is deployed to handle its many different facets.
Thankfully, Trapets has in place a system that offers the ideal solution for meeting these new directives. With Trapets’InstantWatch platform, business owners can meet these new directives, reporting suspicious activities as flagged by the system.
Trapets’ InstantWatch platform is a highly efficient and user friendly surveillance and compliance platform. It offers effective money laundering and market abuse monitoring and also provides the perfect solution for global PEP and sanctions list screening.
To help achieve the risk based system recommended in the directive, the InstantWatch AML platform offers a number of different options of pattern analysis which can be applied to flag any behaviour that is not consistent with a customer’s transaction, bringing it up for further investigation.
Trapets’ InstantWatch AML will analyze transactions in real-time or in batches and based on a pre-configured set of rules. It will then issue alerts when it comes across any suspicious transaction as triggered by the configured rules.
While performing an automatic risk assessment of a customer, their account and transactions, the system factors in properties like nationality, country of residence, type of account and more. The system can also perform advanced pattern analysis for specific transactions. For example, you can setup the system to perform advanced analysis on PEPs or UBOs.
Within the system, you can create case files with all the relevant documents for each case neatly attached. This helps with reporting and also with proving that you did indeed carry out proper CDD as stipulated by the directive.
The solution offered by Trapets’ InstantWatch AML platform is one that businesses should promptly take advantage of today to help them meet the requirements of this new directive. This system is robust and fully capable of handling the different aspects of the directive, leaving your business fully compliant with money laundering and counterterrorist financing regulations.
Contact Trapets today to find out more about their InstantWatch AML platform.
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