The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

Made: at 9.20 a.m. on 22nd June 2017

Laid before Parliament: at 4.30 p.m. on 22nd June 2017

Coming into force: 26th June 2017

The Treasury are designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to the prevention of money laundering and terrorist financing.

The Treasury in exercise of the powers conferred by section 2(2) of that Act and by sections 168(4)(b), 402(1)(b), 417(1) and 428(3) of the Financial Services and Markets Act 2000 , make the following Regulations.

PART 1 — Introduction

Citation and commencement

1

• (1) These Regulations may be cited as the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

• (2) These Regulations come into force on 26th June 2017.

Prescribed regulations

2

These Regulations are prescribed for the purposes of sections 168(4)(b) (appointment of persons to carry out investigations in particular cases) and 402(1)(b) (power of the FCA to institute proceedings for certain other offences) of the Financial Services and Markets Act 2000 .

General interpretation

3

• (1) In these Regulations—

• “Annex 1 financial institution” has the meaning given by regulation 55(2);

• “appropriate body” means any body which regulates or is representative of any trade, profession, business or employment carried on by a relevant person;

• “art market participant” has the meaning given by regulation 14(1)(d);

• “auction platform” has the meaning given by regulation 14(1)(c);

• “auditor” (except in regulation 31(4)) has the meaning given by regulation 11(a);

• “authorised cryptoasset firm” means an authorised person who is authorised to carry on a regulated activity specified by Chapter 2B (cryptoassets) of Part 2 (specified activities) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

• “authorised person” means a person who is authorised for the purposes of FSMA;

• “the FCA” means the Financial Conduct Authority;

• “beneficial owner”—in the case of a body corporate or partnership, has the meaning given by regulation 5;in the case of a trust or similar arrangement, or the estate of a deceased person in the course of administration, has the meaning given by regulation 6;in any other case, has the meaning given by regulation 6(9);

• “body corporate”—includes—a body corporate incorporated under the laws of the United Kingdom or any part of the United Kingdom, anda body corporate constituted under the law of a country or territory outside the United Kingdom;but does not include—a corporation sole, ora partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;

• “bill payment service provider” means an undertaking which provides a payment service enabling the payment of utility and other household bills;

• “branch”, except where the context otherwise requires, means a place of business that forms a legally dependent part of the entity in question and conducts directly all or some of the operations inherent in its business;

• “business relationship” has the meaning given by regulation 4;

• ...

• “the capital requirements regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms;

• “cash” means notes, coins or travellers' cheques, in any currency;

• “casino” has the meaning given by regulation 14(1)(b);

• “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

• “contract of long-term insurance” means any contract falling within Part 2 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ;

• “correspondent relationship” has the meaning given by regulation 34(4);

• “credit institution” has the meaning given by regulation 10(1);

• “cryptoasset business” has the meaning given by regulation 64B;

• “cryptoasset exchange provider” has the meaning given by regulation 14A(1);

• “custodian wallet provider” has the meaning given by regulation 14A(2);

• “customer due diligence measures” means the measures required by regulation 28, and where relevant, those required by regulations 29 and 33 to 37;

• “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act);

• “Department for the Economy” means the Department for the Economy in Northern Ireland;

• “designated supervisory authority” has the meaning given by regulation 76(8);

• “document” means anything in which information of any description is recorded;

• “electronic money” has the meaning given by regulation 2(1) of the Electronic Money Regulations 2011 ;

• “electronic money institution” has the meaning given by regulation 2(1) of the Electronic Money Regulations 2011;

• “electronic money issuer” has the meaning given in regulation 2(1) of the Electronic Money Regulations 2011;

• “eligible Scottish partnership” has the meaning given in regulation 3 of the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 (key terms) ;

• “the emission allowance auctioning regulation” means Commission Regulation (EU) No 1031/2010 of 12th November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community ;

• “enactment” includes—an enactment contained in subordinate legislation;an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament;an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales; andan enactment contained in, or in an instrument made under, Northern Ireland legislation;

• “enhanced customer due diligence measures” means the customer due diligence measures required under regulations 33 to 35;

• “estate agent” has the meaning given by regulation 13(1);

• ...

• “external accountant” (except in regulation 31(4)) has the meaning given by regulation 11(c);

• “financial institution” has the meaning given by regulation 10(2);

• “firm” means any entity that, whether or not a legal person, is not an individual and includes a body corporate and a partnership or other unincorporated association;

• “fourth money laundering directive” means Directive 2015/849/EU of the European Parliament and of the Council of 20th May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing , as amended by Directive 2018/843 of the European Parliament and of the Council of 30th May 2018;

• “FSMA” means the Financial Services and Markets Act 2000 ;

• “funds transfer regulation” means Regulation 2015/847/EU of the European Parliament and of the Council of 20th May 2015 on information accompanying transfers of funds ;

• ...

• “group” has the meaning given by section 421 (group) of FSMA ;

• “high value dealer” has the meaning given by regulation 14(1)(a);

• “independent legal professional” has the meaning given by regulation 12(1);

• “insolvency practitioner” has the meaning given by regulation 11(b);

• “law enforcement authority” has the meaning given by regulation 44(10);

• “letting agent” has the meaning given by regulation 13(3);

• “local weights and measures authority” has the meaning given by section 69 of the Weights and Measures Act 1985 (local weights and measures authorities) ;

• “manager”, in relation to a firm, means a person who has control, authority or responsibility for managing the business of that firm, and includes a nominated officer;

• “markets in financial instruments directive” means Directive 2014/65/EU of the European Parliament and of the Council of 15th May 2014 on markets in financial instruments ;

• “markets in financial instruments regulation” means Regulation (EU) 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (as that Regulation forms part of domestic law under section 3 of the European Union (Withdrawal) Act 2018);

• “money laundering” has the meaning given by section 340(11) of the Proceeds of Crime Act 2002 ;

• “money service business” means an undertaking which by way of business operates a currency exchange office, transmits money (or any representation of monetary value) by any means or cashes cheques which are made payable to customers;

• “the NCA” means the National Crime Agency;

• “nominated officer” means a person who is nominated to receive disclosures under Part 3 (terrorist property) of the Terrorism Act 2000 or Part 7 (money laundering) of the Proceeds of Crime Act 2002;

• “notice” means a notice in writing;

• “occasional transaction” means a transaction which is not carried out as part of a business relationship;

• “officer”, except in Part 8 and Schedule 5—in relation to a body corporate, means—a director, secretary, chief executive, member of the committee of management, or a person purporting to act in such a capacity, oran individual who is a controller of the body, or a person purporting to act as a controller;in relation to an unincorporated association, means any officer of the association or any member of its governing body, or a person purporting to act in such a capacity; andin relation to a partnership, means a partner, and any manager, secretary or similar officer of the partnership, or a person purporting to act in such a capacity;

• “ongoing monitoring” (except where the context otherwise requires) means at least the measures described in regulation 28(11);

• “payment services” has the meaning given by regulation 2(1) of the Payment Services Regulations 2017;

• “payment service provider” has the meaning given in regulation 2(1) of the Payment Services Regulations 2017;

• “politically exposed person” or “PEP” has the meaning given by regulation 35(12);

• “the PRA” means the Prudential Regulation Authority;

• “PRA-authorised person” has the meaning given by section 2B(5) of FSMA ;

• “proliferation financing” has the meaning given by regulation 16A(9);

• “regulated activity” has the meaning given by section 22 of FSMA (regulated activities);

• “regulated market”— within the United Kingdom, means a UK regulated market, as defined by Article 2(1)(13A) of the markets in financial instruments regulation; and outside the United Kingdom, means—within the EEA, an EU regulated market, as defined by Article 2(1)(13B) of the markets in financial instruments regulation; oroutside the EEA, a regulated financial market which subjects companies whose securities are admitted to trading to disclosure obligations which are equivalent to the specified disclosure obligations;

• “relevant parent undertaking” means a relevant person which is a parent undertaking;

• “relevant person” means a person to whom, in accordance with regulation 8, Parts 1 to 6 , 7A and 8 to 11 of these Regulations apply;

• “relevant requirement” has the meaning given by regulation 75;

• “self-regulatory organisation” means one of the professional bodies listed in Schedule 1 to these Regulations;

• “senior management” means an officer or employee of the relevant person with sufficient knowledge of the relevant person's money laundering, terrorist financing and proliferation financing risk exposure, and of sufficient authority, to take decisions affecting its risk exposure;

• ...

• “specified disclosure obligations” means—disclosure obligations set out in Articles 17 and 19 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16th April 2014 on market abuse ; disclosure obligations imposed as a result of rules made by the FCA by virtue of regulation 14 of the Public Offers and Admissions to Trading Regulations 2024; disclosure obligations consistent with the requirements in sections 4 and 5.5 of, and rules 6.1.1 to 6.1.15 in, the Disclosure Guidance and Transparency Rules source book made by the FCA under section 89A of FSMA as those rules have effect on IP completion day; and...

• “specified investment cryptoasset” has the meaning given by article 3 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (interpretation);

• “specified investment cryptoasset firm” means an authorised person who—has permission under Part 4A of FSMA to carry on a regulated activity other than one specified by Chapter 2B (cryptoassets) of Part 2 (specified activities) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, andcarries on activity under that permission in relation to specified investment cryptoassets;

• “supervisory authority” in relation to—any relevant person, means the supervisory authority specified for such a person by regulation 7;any payment service provider, means the transfer of funds supervisory authority;

• “supervisory functions” means the functions given to a supervisory authority under these Regulations;

• “tax adviser” (except in regulation 31(4)) has the meaning given by regulation 11(d);

• “telecommunication, digital and IT payment service provider” has the meaning given by regulation 53;

• “terrorist financing” means (except where the context otherwise requires) an act which constitutes an offence under—section 15 (fund-raising), 16 (use and possession), 17 (funding arrangements), 18 (money laundering) or 63 (terrorist finance: jurisdiction) of the Terrorism Act 2000 ;paragraph 7(2) or (3) of Schedule 3 (freezing orders: offences) to the Anti-terrorism, Crime and Security Act 2001 ; regulations 8 to 13, 25 or 26 of the ISIL (Da'esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019 or regulations 11 to 16 of the Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019;; or any of regulations 11 to 16 of the Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019;...

• “third country” means a state other than the United Kingdom;

• “transfer of funds supervisory authority” means the supervisory authority specified for payment service providers in regulation 62;

• “trust or company service provider” has the meaning given in regulation 12(2).

• “UK auctioning regulations” means the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021;

• “the UK GDPR” has the same meaning as in Parts 5 to 7 of the Data Protection Act 2018 (see section 3(10) and (14) of that Act);

• “UK regulated market” means a recognised investment exchange within the meaning of section 285(1)(a) of FSMA, which is not an overseas investment exchange within the meaning of section 313(1) of FSMA.

• (2) In these Regulations—

• (a) references to an amount in sterling includes reference to an equivalent amount in any currency;

• (b) the equivalent in another currency on a particular day of a sum expressed in sterling is determined by converting the sum in sterling into its equivalent in ... that other currency using the London closing exchange rate for sterling and the relevant currency for the previous working day;

• (c) references to “real property” include, in relation to Scotland, references to heritable property;

• (d) references to business being carried on in the United Kingdom, or a person carrying on business in the United Kingdom, are to be read in accordance with regulation 9;

• (e) references to a person having a “qualifying relationship” with a PRA-authorised person, or with an authorised person are to be read in accordance with section 415B(4) of FSMA ;

• (f) “parent undertaking” and “subsidiary undertaking” have the same meaning as in the Companies Acts (see section 1162 of and Schedule 7 to, the Companies Act 2006 (parent and subsidiary undertaking) ).

Meaning of business relationship

4

• (1) For the purpose of these Regulations, “business relationship” means a business, professional or commercial relationship between a relevant person and a customer, which—

• (a) arises out of the business of the relevant person, and

• (b) is expected by the relevant person, at the time when contact is established, to have an element of duration.

• (2) A relationship where the relevant person is asked to provide one or more of the services described in regulation 12(2)(a), (ab), (b) or (d) is to be treated as a business relationship for the purpose of these Regulations, whether or not the relationship is otherwise expected to have an element of duration.

• (3) For the purposes of these Regulations, an estate agent is to be treated as entering into a business relationship with a purchaser (as well as with a seller), at the point when the purchaser's offer is accepted by the seller.

Meaning of beneficial owner: bodies corporate or partnership

5