Elusive threats: terrorists and PEPs

Last year was identified with formal introduction in the UK of the risk based approach (RBA) although, as many in UK financial services point out, it was not exactly a new idea. Even so, over the coming months money laundering officers and their advisers will be grappling with the concept as they seek to understand how it will be interpreted by regulators and the courts; and in some areas they will be earnestly hoping for clarity or inspiration before the Third EU ML Directive is switched on in mid December. Several influential practitioners reflected on the challenges their organisations face in making the RBA work during a panel session at the recent Osney Media 6th Annual MLRO Convention in London. James London, Head of Financial Crime Policy Unit, UK Financial Services Authority (FSA) was in the chair.

Reporting by Timon Molloy, Editor

“How have you implemented the risk-based approach to tackle financial crime and is it working?” James London quizzed Bob Upton, Deputy Group MLRO, Lloyds TSB Group . “The answer to the latter is definitely ‘yes’,” said Upton. He noted that the revised Joint Money Laundering Steering Group (JMLSG) Guidance, published in the early part of 2006, contain an entire chapter on the RBA and it runs like a golden thread through the text of the Third EU Directive (3MLD). The process was one of evolution, said Upton, and with a “firm foundation” now built, Lloyds TSB was seeking to achieve a real return on investment from its financial crime work.