Money Laundering (Amendment) Regulations 2019
On 10 January 2020 changes to the Government’s Money Laundering Regulations came into force. They update the UK’s AML regime to incorporate international standards set by the Financial Action Task Force (FATF) and to transpose the EU’s 5th Money Laundering Directive. Specific changes to the regulations that may affect your business include the following categories:
New Obliged Entities
- regulation 11(d) provides an expanded definition of what a tax adviser is, which means anyone who provides support with tax matters will now come under the definition of an accountancy service provider.
- regulation 13 (3) to (7) defines letting agency businesses.
- regulation 14 defines what an art market participant is and what a ‘work of art’ is.
Compliance under MLRs
- regulation 19 means that businesses need to carry out a money laundering risk assessment of new products, business practices, or technologies before they implement them.
- regulation 20 sets out requirements in respect of business group-wide policies on the sharing of information about customers, customer accounts, and transactions for money laundering/terrorist financing purposes.
- regulation 24 agents of money service business principals who are delivering the regulated business must receive relevant training from their principals.
- regulation 26 (7)(b) sets out requirements to ensure individuals convicted of relevant offences do not act in key roles in regulated firms.
- regulation 27 requires art market participants to apply customer due diligence measures on all transactions of 10,000 euros or more regardless of payment method.
Customer due diligence
- regulation 27 sets out requirements for relevant persons to apply customer due diligence measures where there is a legal duty under the relevant international tax compliance regulations, or a duty to review information relevant to the risk assessment or beneficial ownership of the customer.
- regulation 28 sets out requirements for measures to be taken to understand the ownership and control structure of persons, trusts and companies as a customer, and to verify the identity of senior managing officials responsible for managing corporate bodies, particularly when the beneficial owner cannot be identified.
- regulation 28 sets out circumstances in which information may be regarded as being reliable and independent of the person providing it where it has been obtained by means of an electronic identification process.
Reporting discrepancies to Companies House
- regulation 30(a) sets out a requirement to check trust and company beneficial ownership registers before establishing a business relationship, and to report any discrepancies found to Companies House.
- regulation 33 sets out requirements to apply enhanced due diligence, explains what a ‘relevant person’ is, and what ‘being established’ means.
- regulation 33 extends the factors a responsible person must consider when assessing the risk of money laundering to include whether the customer is third country national applying for residency rights in an EEA state.
- regulation 33 extends ‘risky’ products to include oil, arms, precious metals and tobacco.
E-money thresholds for customer due diligence (CDD)
- regulation 38 reduces the threshold for which low risk electronic money products can be exempt from customer due diligence from 250 euros to 150 euros.
Registration with HMRC
regulation 56 explains that money service business and trust or company service businesses who apply to register from 10 January 2020 will not be able to carry out relevant activity until they are registered with HMRC
Fifth Money Laundering Directive
This latest directive revisits certain areas of the Fourth Directive to further strengthen transparency and counter-terrorist provisions. The requirements of 5MLD must come into effect through national law by 10 January 2020 in line with Article 4 of the 5MLD.
The Fifth Directive introduces a number of elements to strengthen the UK Regime;
- New obliged entities
- Electronic money
- Customer Due Diligence (CDD)
- Obliged entities: beneficial ownership requirements
- Enhanced Due Diligence
- Politically Exposed Persons
- Mechanisms to report discrepancies in beneficial ownership information
- Trust Registration service
- National register of bank account ownership
- Reporting by Treasury
- Pooled client accounts Continue reading “Implementation of the Fifth Money Laundering Directive”
E-Filing Software: When Data Anonymisation Begins
We will be rolling out the latest stage of updates to accommodate for GDPR options tonight 24 May 2018. Our system will restart Friday 25th May.
We are obliged under the Money Laundering Regulations to retain records of transactions for a period of five years from ceasing a relationship. Please note that we will not commence the procedure for anonymising any historic data based on our configuration options until 6th June.
Understanding Historical Last Active Date
For historic, old, records the software never used to store the concept of a “Last Active Date” for customers. This means that for some of our longer standing customers we will be back filling this information based on the following assumptions.
First, we will check when the last Order was placed by the customer or invoice raised or payment made, or if not then revert to the last Incorporation date of any companies on their account, or if that does not exist we will then revert to the date the user account was created.
A new watchdog launches 18 January 2018 to strengthen the UK’s defences against money laundering and terrorist financing.
The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a new regulator set up by the government to strengthen the UK’s anti-money laundering (AML) supervisory regime, it is based within the FCA and will work with and ensure all the UK professional body AML supervisors provide consistently high standards of AML supervision and with law enforcement to strengthen cooperation. Continue reading “OPBAS Launches professional body supervision”
In the budget speech the Chancellor announced further measures to tackle professional enablers of tax avoidance and evasion.
The government is investing a further £155 million in additional resources and new technology for HMRC. This investment is forecast to help bring in £2.3 billion of additional tax revenues by allowing HMRC to tackle tax leakage through avoidance and evasion.
In particular, the resource is earmarked for further tackling those who are engaging in marketed tax avoidance schemes, enhancing efforts to tackle the enablers of tax fraud and hold intermediaries accountable for the services they provide using the corporate criminal offence and increasing HMRC’s ability to tackle non-compliance among mid-size businesses and wealthy individuals.
People with Significant Control (Amendment) Regulations 2017
The Government enacted the legislation necessary to implement changes required by the Fourth Money Laundering Directive to the UK regime for the disclosure of people with significant control (PSCs). Two sets of amending regulations were made at the last minute, both of which came into force on 26 June 2017.
- the Information about People with Significant Control (Amendment) Regulations 2017 (SI 2017/693); and
- the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 (SI 2017/694).
Both sets of regulations were laid before Parliament on 23 June, just three days before they came into force. Continue reading “People with Significant Control (Amendment) Regulations 2017”
Changes to PSC registers Transitional Arrangements
Under the transitional arrangements set out in the Schedule to the 2017 Regulations, the obligation in s. 790VA to notify changes to Companies House applies to a change to a company’s PSC register made before, on or after 26 June 2016 unless the company has already notified the change in a confirmation statement. Any change to the PSC register made before 26 June 2017 that is notifiable under this rule, must be notified to Companies House before the end of the period of 14 days beginning with 26 June 2017. Continue reading “Changes to PSC registers Transitional Arrangements”
With the advent of the Money Laundering Regulations 2017 just around the corner, getting your policies and procedures ship shape and compliant with the new Regulations can be time consuming especially in the light of Regulation 18(4) which states ‘A relevant person must keep an up-to-date written record of all steps it has taken’ which means your procedures may be asked for by your Supervisory body.
At the heart of the Regulations has always been knowing who you deal with and as such the verification of the client and any beneficial owners are paramount. The new JMLSG guidance in 5.3.14 makes it clear on the verification of not just the customer but also any beneficial owners.
Verification methods have noticeably shifted away from ‘so called identity documents’ to electronic verification, which can offer a much more reliable range of verification data without meeting the customer or beneficial owner face to face.
The range of verification SmartSearches we offer as an agent of Smart Credit are one of the most advanced and reliable offered in the UK covering individuals and company compliance issues.
Please contact us to see how we can help you with your verification of customers on a non-contractual basis.
The next in the Lifecycle national series of FREE training courses is taking place at a venue near you in May 2017.
This series of free seminars is taking place across the UK in May and sees Steve O’Neill, from our partner BTC, present his thoughts on the impact of the new legislation within the Money Laundering Regulations 2017 which are due to come into force later this year.
In his sessions, he will provide an overview of some of the more recent developments that will take place with the introduction of the new legislation that is due to come into effect on 26 June 2017. Continue reading “Seminar Invitation: Anti Money Laundering Update”
PEOPLE WITH SIGNIFICANT CONTROL (PSC)
From April 2016
You need to start keeping a record of the people who control your company. There are criminal penalties if you don’t do this.
For most companies these will be individuals who:
- Hold more than 25% of the company’s shares
- Hold more than 25% of the company’s voting rights
- Have the right to appoint or remove the majority of directors
If an individual does not meet the above conditions, check to see if you have anyone who:
- Has the right to, or actually exercises, significant influence or control over the company
It could also be individual who:
- Has the right to, or actually exercises, significant influence or control over a trust or company that meets one of the above conditions
There is some more information on how to identify your PSCs:
This is the statutory guidance issued by BIS Continue reading “PSC requirements – What you must do”