HM Treasury has published a  consultation on ‘Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022' and ‘Call for Evidence: Review of the UK’s AML/CFT regulatory and supervisory regime’.

The Economic Crime Plan 2019-22, published in 2019, set out the collective public-private response to economic crime. This included a review of the Anti-money Laundering regulations (AML) and the Oversight of Professional Body Anti-Money Laundering and Counter-Terrorist Financing Supervision Regulations 2017 (OPBAS regulations).

Since leaving the EU, the UK also needs to set some AML measures into its own primary legislation. The AML regulations' consultation seeks views on a wide range of items many of which will potentially impact professional firms, including:

  • Specific amendments to the scope of the regulated sector to exempt particular payment service providers which may present a low risk of Money Laundering (ML) and Terrorist Financing (TF). Potential activities for exclusion are:
    • Account Information Service Providers (AISPs).
    • Bill Payment Service Providers (BPSPs) and Telecom, Digital and IT Payment Service Providers (TDITPSPs).
  • Payment Initiation Service Providers (PISPs) have been suggested for exclusion from the regulated sector, but the consultation also seeks views on the potential ML/TF risks presented by PISPs.
  • Consideration of removing artists from the definition for Art Market Participants (AMPs). This is due to the lack of significant evidence of ML and TF risk attributed to the selling of works of art by those who have created them.
  • Whether further amendments may be necessary in due course to bring into scope of the AMP definition those who trade in the sale and purchase of digital art.
  • A proposal to give AML/CTF supervisors the legal permission to directly request SARs from members of their supervised population as part of their monitoring approach. This would improve their own risk-based approach to supervision. This will allow for a consistent approach across all supervisors to accessing the content of SARs.
  • Seeking views on the merits of updating the activities that make a person a credit and financial institution as per regulation 10 of the MLRs to align with the FSMA and defined terms under the Regulated Activities Order.
  • Measures in FATF recommendation 7 that requires countries and the private sector to identify, and assess the risks of potential breaches, non-implementation or evasion of the targeted financial sanctions related to proliferation financing (PF). Views are sought.
  • Improving the transparency and integrity of the Companies House register for Limited Liability Partnerships (LLPs) and LPs, extension of the terms ‘Trust or Company Service Provider’ and ‘business relationship’.
  • Reporting of discrepancies: to introduce an ongoing requirement to report discrepancies in beneficial ownership information.
  • Crypto asset transfers: the ‘travel rule’. FATF Recommendation 16 (R.16) requires that countries ensure that financial institutions send and record information on the originator and beneficiary of a wire transfer. It is proposed to make this subject to a GBP 1,000 de minimis and that this information remains with the transfer or related message throughout the payment chain. Now out of the EU, the UK needs to know set its own rules for R.16. It proposes to use its powers to amend the MLRs, which will also ensure that AML legislation for the crypto asset sector is consolidated in one place, and is, therefore, easier to navigate.

The Call for Evidence: Review of the UK’s AML/CFT regulatory and supervisory regime aims to assess MLRs and OPBAS regulations and supervisory regimes by looking at three themes:

1. The overall effectiveness of the regimes and their extent (i.e. the sectors in scope as relevant entities).

2. Whether key elements of the current regulations are operating as intended.

3. The structure of the supervisory regime including the work of OPBAS to improve the effectiveness and consistency of PBS supervision.

Both the consultation and call for evidence run until 14 October 2021.

Useful guides on this topic

Anti-Money Laundering Zone
AML Zone contains checklists and guidance on the Anti-Money Laundering requirements that businesses need to follow

External links

Call for Evidence: Review of the UK’s AML/CFT regulatory and supervisory regime

Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Statutory Instrument 2022

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