Telephone 020 3813 2890 for a free no obligation chat about your regulatory requirements with one of our compliance consultants.

© Compound Growth Limited 2012 - 2020 | Terms of Use  Privacy Policy

Registered in England and Wales as limited company number 07626537 - Registered Office 120 Pall Mall, London, SW1Y 5EA

We use cookies, if you consent to this use, please continue to browse our site.

Here to help with Regulation and Compliance

Compound Growth

5MLD: New UK Money Laundering Regulations Now Effective(MLR 2019)

24 February 2020

Now Effective: Money Laundering Regulations 2019 (MLR 2019)

From 10th January 2020 changes to the Government's Money Laundering Regulations came into force. These changes updated the UK’s Anti-Money Laundering Regime to transpose the EU’s 5th Money Laundering Directive and incorporate the international standards set by the Financial Action Task Force (FATF).

What’s New: MLR 2019?

The Money Laundering & Terrorist Financing (Amendment) Regulations 2019 (MLR 2019) amends the previous Money Laundering Regulations (MLR 2017 – the Money Laundering, Terrorist Financial and Transfer of Funds (Information on the Payer) Regulations 2017).

In particular there are some new specific areas, as highlighted below, that the new MLR 2019 requires firms to comply with:

High-risk factors

MLR 2019’ amendment to regulation 33 requires firms to include new additional high-risk factors when assessing the need for enhanced due diligence (EDD), and seek additional information and monitoring in certain cases.

In particular, these may occur where:

• there are relevant transactions between parties based in high-risk third countries
• the customer is the beneficiary of a life insurance policy
• the customer is a third-country national seeking residence rights or citizenship in exchange for transfers of capital, purchase of a property, governments bonds or investment in corporate entities 
• non-face to face business relationships or transactions without certain safeguards, (e.g. as set out in regulation 28 (19) concerning electronic identification processes).
• transactions related to oil, arms, precious metals, tobacco products, cultural artefacts, ivory or other items related to protected species, or archaeological, historical, cultural and religious significance, or of rare scientific value

E-money thresholds for customer due diligence (CDD)

In addition, MLR 2019’s amendment to regulation 38 regarding electronic money means that firms can only forego customer due diligence (CDD) measures in situations where:

• the maximum amount which can be stored electronically is €150 (this was previously €250)
• the payment instrument used in connection with the electronic money (the relevant payment instrument) is:

•  not reloadable, or 
•  is subject to a maximum limit on monthly payment transactions of €150, which can only be used in the UK (previously €250)

• the relevant payment instrument is used exclusively to purchase goods or services
• anonymous electronic money cannot be used to fund the relevant payment instrument

Customer due diligence

Further amendments to regulation 28 require firms to update their records relating to the beneficial ownership of corporate clients.

Firms will also need to understand the ownership and control structure of their corporate customers, and record any difficulties encountered in identifying beneficial ownership.

Reporting discrepancies to Companies House

MLR 2019 introduces regulation 30A, which is a new requirement for firms to report to Companies House discrepancies between the information the firm holds on their customers compared with the information held in the Companies House Register.

Duty to respond to requests for information about accounts and safe-deposit boxes

The new Part 5A, that comes into force on 10 September 2020, imposes duties on credit institutions and the providers of safe custody services to respond to requests for information, via a central automated mechanism.

The Gambling Commission or a law enforcement authority may request details related to accounts and safe-deposit boxes including, but not limited to, name, date of birth and address of the holder(s) or beneficial owner(s).

Next Steps:

All firms should review and familiarise themselves with the requirements of the new Money Laundering Regulations 2019 since compliance with these new obligations is now in force.

As a reminder, Businesses carrying out certain cryptoassets activities will also need to comply with MLR 2019 and register with the FCA during 2020 since they also became regulated under the FCA from 10 January 2020 when the MLR 2019 came into effect.

If your firm requires any support or assistance in implementing the changes required under the MLR 2019, we would be happy to assist, including providing bespoke AML Training to staff. Please contact our friendly Compliance Support team  to discuss your requirements.

Read our latest articles, news and views affecting compliance and regulation in the UK Financial Services Industry.