The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations transpose the EU’s fourth money laundering directive (4MLD) and commenced on 26th June 2017. The regulations replace the Money Laundering Regulations 2007 (MLRs 2007). Some of the changes are significant and it is important for all firms undertaking work in the regulated sector to be familiar with them.
Key changes are summarised below:
- Risk Assessments (reg 18) will have to be undertaken and must be provided to the SRA upon request.
- Policies, controls and procedures (reg 19) are enhanced. They include obligations for firms to communicate policies to areas of their operations outside the UK.
- Group level policies, controls and procedures (reg 20) require “relevant parent undertakings” to apply AML policies and procedures to subsidiaries both in the UK and abroad.
- Internal controls (reg 21) are enhanced with the requirement to appoint an individual at board level as officer responsible for compliance. Relevant employees and agents must be screened prior to appointment. An independent audit function must be established to evaluate policies controls and procedures. These provisions should be proportionate to the size of the organisation.
- Training (reg 24) must be provided regularly to relevant employees.
- Approval of beneficial owners of firms (reg 26) must be achieved prior to the 26th June 2018. Acting as a beneficial owner, officer or manager without approval is an offence, the only defence being that an application was applied for prior to the 26th June 2018 and is awaiting determination.
- Customer due diligence (CDD) (regs 27 and 28) regulations are more prescriptive than previously. Amongst other things, firms must identify and verify third parties acting on behalf of customers.
- Enhanced due diligence (EDD) (reg 33) must be applied in certain circumstances in particular in relation to “high risk third countries”.
- Politically exposed persons (PEPS) (reg 35) are more widely defined to include domestic PEPS.
- Reliance (reg 38) Where a third party is relied upon that third party must provide copies of CDD on request or within 2 working days at the latest.
Olliers Solicitors – Specialist Criminal Defence Lawyers
Written by Matthew Claughton. Matthew has substantial experience of acting in cases of alleged money laundering. He also has considerable experience of restraint orders within the context of complex investigations. If you require advice in relation to money laundering please contact Matthew Claughton by email at email@example.com or by telephone on 0161 827 7010.