- with Inhouse Counsel
- in United States
On 27th April 2026, the FIAU issued an updated version of the Implementing Procedures Part I, herein referred to as the “IPs Part I”.
The main changes introduced to the IPs Part I are as follows:
A. Changes to the definition of a Beneficial Owner
These changes were carried out under Section 4.2.2 of the IPs Part I whereby footnote 42, which previously included an exception for Trusts and similar legal arrangements to limit themselves to consider any body acting as a beneficial owner for a Settlor, Protector and/or Trustee of a Trust, has been now removed to ensure alignment with the identification and verification requirements for beneficial owners of a Trust as set out in Section 4.3.2.5(iii).
Accordingly, subject persons are now required to look beyond any legal entity or arrangement and identify the natural person(s) who ultimately qualify as the beneficial owner(s).
B. Changes to the Employee Screening and Record Keeping Obligations
Section 7.5 of the IPs Part I makes it no longer mandatory for subject persons to obtain and retain a copy of the police conduct certificates as part of the employee screening procedures. However, subject persons may, as deemed appropriate depending on the level of risk, still request to view a police conduct certificate, or equivalent documentation, should the need arises, as part of the employee screening process.
Therefore, subject persons should employ alternative measures to ensure that employees are of good repute and honest, and such measures should be carried out prior to the commencement of employment or, if already employed with the subject person, whenever the employee is entrusted with new roles or responsibilities concerning relevant financial business or relevant activity on behalf of the subject person, or when directly participating in the subject person’s compliance with its AML/CFT obligations.
Ultimately, employee screening should be conducted on a risk-based approach and the measures undertaken should be commensurate with the risks associated with the responsibilities, tasks and duties performed by the employee within the respective role/s.
Furthermore, other minor changes were introduced with reference to the record-keeping of employee screening including the retention of a written record of the screening process undertaken and its outcome, including how the assessment was carried out, by whom it was conducted, and the conclusion reached regarding the employee’s integrity. As a result of this, minor amendments have been carried out to Sections 9.2 and 9.3.6 of the IPs Part I.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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