New reporting requirement for AML obliged entities comes into force

The Fifth Anti-Money Laundering Directive (5MLD) came into force on Friday and introduced the requirement for obliged entities to report certain information discrepancies to Companies House.

From 10 January 2020, all obliged entities must tell Companies House if there’s a discrepancy between the information that they hold about a beneficial owner and information on the Companies House people with significant control (PSC) register.

The requirement extends to any obliged entity required to carry out customer due diligence under anti-money laundering regulations. These entities include banks, financial institutions and credit reference agencies, among others.

“Organisations subject to anti-money laundering regulations will already be familiar with the steps they need to take in order to achieve compliance,” head of PSC compliance at Companies House Lee Robins said.

“However, these entities must now report any material differences between beneficial ownership information held by a client and the details on the Companies House PSC register.”

According to Companies House, discrepancies must be reported if there’s a material difference between the two sets of information, following which they will be internally investigated.

5MLD explained

The 5MLD was adopted by the EU in July 2018 as part of the Juncker Commission’s response to several events, including the terrorist attacks in Paris in 2015 and Brussels in 2016, and the Panama Papers scandal.

The UK Parliament adopted new legislation paving the way for the implementation of 5MLD just before Christmas.

With the amending regulations coming into force on 10 January, firms haven’t been given much time to comply with the new obligations. As such the FCA has advised: “In assessing our approach to firms that may not be compliant on that date, we will take into account evidence that they have taken sufficient steps before that date to comply with these new obligations.”