Treasury consults on updating anti-money laundering regulations

The Treasury is consulting on how the government plans to transpose updated EU international anti-money laundering and counter-financing of terrorism (AML/CFT) regulations into UK law, saying it wants the rules to act as a deterrent without imposing too great a burden on business

The consultation invites views and evidence on the transposition of the fourth money laundering directive and the fund transfer regulation (FTR).

The directive was published by the EU last year and introduces a number of new requirements and changes to some of the obligations under the previous directive. All EU member states, including the UK, have two years to transpose the requirements national law which will, where necessary, amend or replace the existing regulations or legislation.

The new FTR accompanies the directive and updates the rules on information on payers and payees, accompanying transfers of funds, in any currency, for the purposes of preventing detecting and investigating money laundering and terrorist financing, where at least one of the payment service providers involved in the transfer of funds is established in the EU.

For example, among the changes in the information required, the regulation provides that a payment service provider must verify certain elements of information for a transaction of any value, where it has received the funds in cash, or in anonymous electronic money.

The Treasury proposes to create a Money Laundering and Transfer of Funds (Information on the Payer) Regulations 2017 in order to transpose both the directive and the FTR, with the new provisions coming into force by 26 June 2017.

The consultation, which runs to 84 pages, looks at a range of issues including a proposed turnover threshold of financial activity set at £100,000 as one of the criteria to comply with in order to be exempt from the directive, and whether the maximum transaction threshold per customer and single transaction should remain at £836 (€1,000). It also considers whether customer due diligence measures should apply to existing customers.

On the topic of risk controls, the consultation considers whether the government should set a threshold of the size and nature of the business for the appointment of a compliance officer and employee screening, as well as an independent audit function. It asks for views on the inclusion of gambling providers, how to apply exemptions to electronic money, as well as whether the regime for politically exposed persons should include senior members of international sporting federations.

There is also discussion of the nature of the criminality test, and whether this should be extended to ‘high value dealers’, along with assessments of the range of sanctions to be imposed for breaking the regulations.

The consultation ends on 10 November.

Consultation on the Transposition of the Fourth Money Laundering Directive is here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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