On 10 January 2020 Fifth Money Laundering Directive (EU) 2018/843 (5MLD) came into force. On 20 December 2019, the UK Government laid before Parliament its implementing legislation, the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (MLR 2019), which amends the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017, and together with MLR 2019, the MLRs).
5MLD expands the scope of businesses to which the UK's anti-money laundering regime applies (for example to tax advisers, letting agents and crypto-asset exchanges), as well as amending a number of the substantive requirements. Many businesses will have made amendments in readiness for the anticipated changes. Nonetheless, with financial crime prevention at the top of the agenda for UK, European and international regulators, it is important to ensure that your policies and procedures are fully compliant with the finer details contained in the recently published MLRs.
This note sets out a brief summary of the changes for relevant persons under MLR 2019.
Relevant persons MLR 2019 extends the list of relevant persons falling within scope of the MLRs to include: those providing material aid or assistance on tax matters; letting agents; art market participants; and cryptoasset exchange providers and custodian wallet providers.1 Policies MLR 2017 requires relevant parent companies to establish, maintain and flow down to all of its subsidiaries (whether incorporated in the UK or elsewhere) group-level policies, controls and procedures on: data protection; and sharing information for the purposes of preventing money laundering with other members of the group. MLR 2019 amends this second bullet to include policies "on the sharing of information about customers, customer accounts and transactions".2 The other record-keeping and review requirements contained in MLR 2017 will also apply to these policies. Training If a relevant person uses agents to help with preventing, identifying or mitigating the risk of money laundering in its business, it must ensure that these agents: are made aware of the law on AML and data protection; and receive regular AML training.3 e-Money thresholds for customer due diligence (CDD) Under MLR 2017, certain low-risk e-money products were exempted from CDD requirements. MLR 2019 reduces these thresholds so that the exemption only applies where all of...