HMRC has published guidance summarising the main changes introduced by the Money Laundering and Terrorist Financing (Amendment) Regulations, SI 2019/1511, which transpose the EU fifth anti-money laundering directive into UK law. All firms must be fully compliant with the regulations from 10 January 2020.
However, HMRC acknowledges the short lead-in time businesses have had to implement the new requirements and says it will take this into account when responding to any compliance failures.
Key changes include:
money service businesses and trust or company service providers who apply to register from 10 January 2020 will not be able to carry out relevant activity until HMRC has determined their application for registration;
the regulations now include businesses trading in art and high-value letting agents among those subject to HMRC supervision;
the online registration system will open in May 2020 for letting agents who rent out commercial or residential property valued at €10,000 or more for a minimum of one calendar month; and
the online registration system is open from 10 January for those in the art market who deal in sales, purchases, and storage of works of art with a value of €10,000 or more, whether for a single transaction or series of linked transactions, regardless of payment method used.
Businesses subject to the regulations must register by 10 January 2021.
Specific changes to the regulations include:
an expanded definition of what a tax adviser is, which means anyone who provides support with tax matters will now come under the definition of an accountancy service provider (reg 11);
definition of letting agency businesses (reg 13);
definition of art market participant and ‘work of art’ (reg 14);
requirement for businesses to carry out a money laundering risk assessment of new products, business practices, or technologies before they implement them (reg 19);
requirements for group-wide policies on the sharing of information about customers, customer accounts, and transactions for money laundering/terrorist financing purposes (reg 20);
requirement for agents of money service business principals who are delivering the regulated business to receive relevant training from their principals (reg 24);
requirement to ensure individuals convicted of relevant offences do not act in key roles in regulated firms (reg 26)
requirement for art market participants to apply customer due diligence measures on all transactions of €10,000 or more regardless of payment method (reg 27);
requirement for relevant persons to apply customer due diligence measures where there is a legal duty under the relevant international tax compliance regulations, or a duty to review information relevant to the risk assessment or beneficial ownership of the customer (reg 27);
requirement to take steps to understand the ownership and control structure of persons, trusts and companies as a customer, and to verify the identity of senior managing officials responsible for managing corporate bodies, particularly when the beneficial owner cannot be identified (reg 28);
circumstances in which information may be regarded as being reliable and independent of the person providing it where it has been obtained by means of an electronic identification process (reg 28);
requirement to check trust and company beneficial ownership registers before establishing a business relationship, and to report to Companies House any discrepancies found (reg 30);
requirement to apply enhanced due diligence, with definitions of ‘relevant person’ and ‘being established’ (reg 33);
factors a responsible person must consider when assessing the risk of money laundering extended to include whether the customer is a third country national applying for residency rights in an EEA state (reg 33);
‘risky’ products extended to include oil, arms, precious metals and tobacco (regulation 33);
threshold for which low-risk electronic money products can be exempt from customer due diligence reduced from €250 to €150 (reg 38); and
preventing money service business and trust or company service businesses who apply to register from 10 January 2020 from carrying out relevant activity until they are registered with HMRC (reg 56).
HMRC has published guidance summarising the main changes introduced by the Money Laundering and Terrorist Financing (Amendment) Regulations, SI 2019/1511, which transpose the EU fifth anti-money laundering directive into UK law. All firms must be fully compliant with the regulations from 10 January 2020.
However, HMRC acknowledges the short lead-in time businesses have had to implement the new requirements and says it will take this into account when responding to any compliance failures.
Key changes include:
money service businesses and trust or company service providers who apply to register from 10 January 2020 will not be able to carry out relevant activity until HMRC has determined their application for registration;
the regulations now include businesses trading in art and high-value letting agents among those subject to HMRC supervision;
the online registration system will open in May 2020 for letting agents who rent out commercial or residential property valued at €10,000 or more for a minimum of one calendar month; and
the online registration system is open from 10 January for those in the art market who deal in sales, purchases, and storage of works of art with a value of €10,000 or more, whether for a single transaction or series of linked transactions, regardless of payment method used.
Businesses subject to the regulations must register by 10 January 2021.
Specific changes to the regulations include:
an expanded definition of what a tax adviser is, which means anyone who provides support with tax matters will now come under the definition of an accountancy service provider (reg 11);
definition of letting agency businesses (reg 13);
definition of art market participant and ‘work of art’ (reg 14);
requirement for businesses to carry out a money laundering risk assessment of new products, business practices, or technologies before they implement them (reg 19);
requirements for group-wide policies on the sharing of information about customers, customer accounts, and transactions for money laundering/terrorist financing purposes (reg 20);
requirement for agents of money service business principals who are delivering the regulated business to receive relevant training from their principals (reg 24);
requirement to ensure individuals convicted of relevant offences do not act in key roles in regulated firms (reg 26)
requirement for art market participants to apply customer due diligence measures on all transactions of €10,000 or more regardless of payment method (reg 27);
requirement for relevant persons to apply customer due diligence measures where there is a legal duty under the relevant international tax compliance regulations, or a duty to review information relevant to the risk assessment or beneficial ownership of the customer (reg 27);
requirement to take steps to understand the ownership and control structure of persons, trusts and companies as a customer, and to verify the identity of senior managing officials responsible for managing corporate bodies, particularly when the beneficial owner cannot be identified (reg 28);
circumstances in which information may be regarded as being reliable and independent of the person providing it where it has been obtained by means of an electronic identification process (reg 28);
requirement to check trust and company beneficial ownership registers before establishing a business relationship, and to report to Companies House any discrepancies found (reg 30);
requirement to apply enhanced due diligence, with definitions of ‘relevant person’ and ‘being established’ (reg 33);
factors a responsible person must consider when assessing the risk of money laundering extended to include whether the customer is a third country national applying for residency rights in an EEA state (reg 33);
‘risky’ products extended to include oil, arms, precious metals and tobacco (regulation 33);
threshold for which low-risk electronic money products can be exempt from customer due diligence reduced from €250 to €150 (reg 38); and
preventing money service business and trust or company service businesses who apply to register from 10 January 2020 from carrying out relevant activity until they are registered with HMRC (reg 56).
