The Money Laundering and Terrorist Financing (Amendment) Regulations 2019

These Regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) (“the MLRs”).

They implement amendments made to 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 (“the fourth money laundering directive”) by Directive 2018/843 of the European Parliament and of the Council of 30th May 2018.

In particular, regulations 3 and 4 amend Parts 1 and 2 of the MLRs to add new categories of “relevant person” as defined in regulation 8 of the MLRs and referred to as “obliged entities” in the fourth money laundering directive. The new businesses covered by the legislation are letting agents, art market participants (including operators of freeports), and providers of exchange or storage services for “cryptoassets” (as defined in new regulation 14A) such as virtual currencies. The definition of tax adviser is extended to those who provide material aid or assistance on tax.

Regulation 4 also amends Part 2 of the MLRs to implement new provisions in the fourth money laundering directive relating to risk assessments, policies, controls and procedures; and to make provision about training for agents under regulation 24 of the MLRs; about publishing directions under regulation 25; and about measures to be taken by supervisors to check the criminal convictions of people they approve under regulation 26.

Regulation 5 amends Part 3 of the MLRs in relation to customer due diligence measures to be taken by relevant persons.

Regulation 6 inserts a new Part 5A into the MLRs to require the Treasury or the Secretary of State to establish a mechanism to enable law enforcement authorities and the Gambling Commission to obtain information about safe-deposit boxes and about accounts held with banks, building societies and credit unions.

Regulation 7 amends Part 6 of the MLRs in relation to the duties of supervisory authorities; information sharing; and requirements for certain businesses to register with Her Majesty’s Revenue and Customs (“HMRC”) or with the Financial Conduct Authority (“FCA”).

Regulation 8 amends Part 8 of the MLRs in relation to information and investigation, in particular conferring new powers on the FCA in relation to cryptoasset service providers; regulation 9 amends Part 9 of the MLRs in relation to enforcement and Part 10 of the MLRs in relation to appeals against directions imposed by the FCA.

Regulations 10 and 13 insert a new Schedule 6A into the MLRs in relation to information-sharing between financial intelligence units including the UK’s National Crime Agency.

Regulation 11 amends Schedule 4 to the MLRs in relation to information to be collected by supervisory authorities.

Regulation 12 amends Schedule 6 to the MLRs, which sets out which provisions of the MLRs are “relevant requirements” for the purpose of enforcement action by HMRC or the FCA under Part 9.

Regulations 14 to 20 make consequential amendments to the Terrorism Act 2000 (c.11), the Proceeds of Crime Act 2002 (c.29), the Companies Act 2006 (c.46) and related secondary legislation and the Electronic Money Regulations 2011 (S.I. 2011/99).

An impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the public sector will be available from HM Treasury at 1 Horse Guards Road, London SW1A 2HQ when it is published.

Footnotes

[^f00001]: S.I. 2007/2133.

[^f00002]: 1972 c. 68. Section 2(2) was amended by section 27 of the Legislative and Regulatory Reform Act 2006 (c.51) and by section 3 of, and the Schedule to, the European Union (Amendment) Act 2008 (c.7). By virtue of the amendment of section 1(2) by section 1 of the European Economic Area Act 1993 (c.51), an order may be made under section 2(2) of the European Communities Act 1972 to implement obligations of the United Kingdom created or arising by or under the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 (Cm 2073) and the Protocol adjusting the Agreement signed in Brussels on 17th March 1993 (Cm 2183).

[^f00003]: 2000 c. 11. Schedule 3A was inserted by section 3 of the Anti-Terrorism, Crime and Security Act 2001 (c.24).

[^f00004]: 2002 c. 29.

[^f00005]: S.I. 2017/692.

[^f00006]: OJ L 156, 19.06.2018, p.43-74.

[^f00007]: OJ L 168 30.06.2017, p.12-82.

[^f00008]: 1979 c. 2. Section 100A was inserted by the Finance Act 1984 (c.2), section 8 and (c.43), Schedule 4.

[^f00009]: 1994 c. 23. Sections 21(6) to (6B) were inserted by section 12(2) of the Finance Act 1999 (c.16).

[^f00010]: S.I. 2015/878, amended by S.I. 2017/598.

[^f00011]: OJ L 257, 28.08.2014, p.73.

[^f00012]: 2006 c. 46; Part 21A was inserted by Schedule 3 to the Small Business, Enterprise and Employment Act 2015 (c.26).

[^f00013]: S.I. 2009/2436, amended by S.I. 2017/693.

[^f00014]: S.I. 2009/1804, amended by S.I. 2016/340.

[^f00015]: S.I. 2017/694.

[^f00016]: S.I. 2011/99.

[^f00017]: S.I. 2017/752.

[^f00018]: 2000 c. 11. Section 1(1) was amended by section 34 of the Terrorism Act 2006 (c.11) and section 75(1) and (2)(a) of the Counter-Terrorism Act 2008 (c.28).

[^f00019]: 2014 c. 14.

[^f00020]: 1985 No. 1205 (N.I. 12).

[^f00021]: 1969 c. 24. Sections 1 and 1A were substituted by the Credit Unions and Co-operative and Community Benefit Societies Act (Northern Ireland) 2016 (c.16), section 8(1).

[^f00022]: 2000 c. 11.

[^f00023]: 2002 c. 29.

[^f00024]: S.I. 2017/1301.

[^f00025]: 2000 c. 8. Section 349 has been amended by section 964 of the Companies Act 2006 (c.46), paragraph 19 of Schedule 12 to the Financial Services Act 2012 (c.21) and by S.I. 2006/1183 and 2007/1093.

[^f00026]: Section 226 was amended by the Financial Services Act 2012 (c.21), section 39 and Schedule 11 and by S.I. 2009/209, 2011/99, 2017/692 and 2017/752. Section 227 was amended by the Consumer Credit Act 2006 (c.14), section 61; the Financial Services Act 2012, section 39 and Schedule 11 and by S.I. 2013/1881.

[^f00027]: Section 212 was amended by the Financial Services Act 2012 (c.21), section 38 and Schedule 10, and by the Financial Services (Banking Reform) Act 2013 (c.33), section 16. Section 213 was amended by the Financial Services Act 2012, section 38 and Schedule 10, and by S.I. 2017/701. Section 214 was amended by the Financial Services Act 2012, section 38 and Schedule 10, and by the Banking Act 2009 (c.1), sections 169 and 174, and by S.I. 2017/701.

[^f00028]: Regulation 93(1) was substituted by S.I. 2018/1337.

[^f00029]: 2000 c. 11.

[^f00030]: 2002 c. 29.

[^f00031]: Sections 339ZH-339ZK (further information orders) were inserted into Part 7 by section 12 of the Criminal Finances Act 2017 (c. 22) (“the 2017 Act”). Other amendments have been made to Part 7 but none are relevant.

[^f00032]: Sections 362A-362I (unexplained wealth orders: England and Wales and Northern Ireland) and 396A-396I (unexplained wealth orders: Scotland) were inserted into Part 8 by sections 1 and 4 of the 2017 Act. Sections 357, 358 and 362 (disclosure orders: England and Wales and Northern Ireland) and sections 391, 392 and 396 (disclosure orders: Scotland) were amended by sections 7 and 8 of the 2017 Act. Other amendments have been made to Part 8 but none are relevant.

[^f00033]: Section 445 was amended by section 24(3) of the 2017 Act.

[^f00034]: Part 3 was amended by Schedule 2 (disclosure orders) to the 2017 Act. Sections 22B-22E (further information orders) were inserted into Part 3 by section 37 of the 2017 Act. Other amendments have been made to Part 3 but none are relevant.

[^f00035]: Section 341 is amended by section 75(1) of the Serious Crime Act 2007 (c. 27); paragraph 2 of Schedule 19 to the Coroners and Justice Act 2009 (c. 25); paragraph 110 of Schedule 7 to the Policing and Crime Act 2009 (c. 26); paragraphs 2 and 25 of Schedule 19 to the Crime and Courts Act 2013 (c. 22); section 38(1) of, and paragraph 55 of Schedule 4 to, the Serious Crime Act 2015 (c. 9); and section 33 of, and paragraph 39 of Schedule 5 to, the Criminal Finances Act 2017 (“the 2017 Act”).

[^f00036]: Schedule 5 was inserted by paragraphs 3 and 4 of Schedule 2 to the 2017 Act.

[^f00037]: 2000 c. 11. Section 21H was inserted by S.I. 2007/3398 and amended by S.I. 2017/692. Schedule 3A was inserted by section 3 of the Anti-Terrorism, Crime and Security Act 2001 (c.24). Part 1 of Schedule 3A was substituted by S.I. 2007/3288. Paragraph 1 of that Schedule was amended by S.I. 2011/99, 2013/3115 and 2015/575. Paragraph 3 of that Schedule was amended by S.I. 2011/2701, 2013/3115 and 2015/575. Part 1 was also amended by S.I. 2017/692.

[^f00038]: OJ L 156, 19.06.2018, p.43-74.

[^f00039]: 1994 c. 23. Sections 21(6) to (6B) were inserted by section 12(2) of the Finance Act 1999 (c.16).

[^f00040]: 1979 c. 2. Section 100A was inserted by the Finance Act 1984 (c.1), section 8 and (c.43), Schedule 4.

[^f00041]: 2002 c. 29. Section 333E was inserted by S.I. 2007/3398 and amended by S.I. 2017/692. Part 1 of Schedule 9 was substituted by S.I. 2007/3287. Paragraph 1 of that Schedule was amended by S.I. 2011/99, 2013/3115 and 2015/575. Paragraph 3 of that Schedule was amended by S.I. 2011/2701, 2013/3115 and 2015/575. Part 1 was also amended by S.I. 2017/692.

[^f00042]: OJ L 156, 19.06.2018, p.43-74.

[^f00043]: 1994 c. 23. Sections 21(6) to (6B) were inserted by section 12(2) of the Finance Act 1999 (c.16).

[^f00044]: 1979 c. 2. Section 100A was inserted by the Finance Act 1984 (c.1), section 8 and (c.43), Schedule 4.

[^f00045]: 2006 c. 46; section 1079A was inserted by S.I. 2014/1557.

[^f00046]: OJ No. L 258, 1.10.2009, p.11-19.

[^f00047]: OJ No. L 169, 30.06.2017, p.46-127.

[^f00048]: S.I. 2009/1804.

[^f00049]: S.I. 2009/2436.

[^f00050]: S.I. 2011/99.

[^f00051]: 2015 c. 26.