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
Support over Christmas
We will be closing the office at close of Business on Friday 20 December 2019, we reopen on 2 January 2020. During this period there will not be telephone support. All online platforms will be operating 24 hours per day, for company formations this is subject to Companies House opening times.
Our support team will be available for limited email support for urgent questions or issues during the following times over the Christmas period:
23rd December – 10.00 – 15:00
24th December – 10.00 – 12:00
25th December – Closed
26th December – Closed
27th December – 10:00 – 15:00
30th December – 10:00 – 15:00
31st December – 10:00 – 12:00
1st January – Closed
Please email email@example.com and we will try to respond as quick as we can. Have a good Christmas break and we will see you all in the new year.
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”
Some good news about a further expansion to the BTC AML Search service, the SmartSearch search platform now has Business Credit Reports powered by Experian becoming available on 15 July. This is an additional service and as such carries an additional cost to the normal company search, each additional credit report search is priced at £6.50+vat in addition to the normal search cost. Continue reading “Business Credit Reports Available Through SmartSearch”
Fifth Money Laundering Directive
The consultation invites comments, evidence and views from stakeholders. Responses to this consultation will then be used to inform final government decisions on transposition. The government intends that the new provisions will come into force in national law by 10 January 2020, in line with Article 4 of 5MLD. Continue reading “Government Consultation of fifth Money laundering Directive”
Christmas Opening Hours
We will be closing the office on Wednesday 19 December 2018 since this is the last day we can despatch documents for pre-Christmas delivery. However, our online systems are open 24 hours every day. We will be having a long weekend break, much deserved, so there will be no telephone support, Thursday 20th, Friday 21st and Monday 24th December telephone support services will remain unavailable until Thursday 2nd January when the office will be fully opened.
During the holiday period there will be email support on firstname.lastname@example.org each day barring the statutory holidays, so if there is an urgent problem, we can contact you to help to resolve.
Have a good festive season and we thank you for your continued custom during the year.
We would like to provide an update on the current state of the Companies House gateway.
Companies House’s systems are currently becoming intermittently unresponsive for prolonged periods of time. This is leading to many submissions being returned with a variant on one of the following errors:
- Companies House Error: No data received from ngsrv
- Companies House Error: Not a “HTTPS” request
- Transmission Failure (Failed to send data request.)
Unfortunately, as these are all responses directly from Companies House’s systems on seemingly valid submissions. This is also causing services that rely on Companies House, such as the name check functionality, to become slow and unreliable.
Our programme providers have been speaking with Companies House since Monday in relation to these errors in hopes that a solution could be found, presently Companies House are unable to provide a timescale as to when these errors will be resolved.
For the time being, we will continue to resubmit these rejections as some submissions are being picked up by their system during the small windows where the gateway is functioning correctly. We are also temporarily returning all company names as available to prevent customers being turned away prior to starting an order, this will result in some orders being raised with company names that are unavailable, however, the alternative is that customers could see lengthy delays before being able to start an order.
Companies House have advised they will not be processing submissions from 12 noon, Friday the 7th of September until Monday the 10th of September. Same day submissions must be submitted by 12 noon on the 7th of September.
We will still be holding all submissions in this time frame in review and will submit once the service has restarted on Monday, Experience tells us some orders can be lost at Companies House during these periods of maintenance.
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.
Officer Eye Colour
As a gentle reminder, please remember that from 25 May 2018 Companies House have also removed the option for Eye Colour from the digital signature questions. Our latest update will take that into consideration.