MLR 2007 amendments from 1 October 2012

HM Treasury has published its response to the consultation on proposed changes to the Money Laundering Regulations.  This includes draft amendments to the Money Laundering Regulations 2007 which are proposed to take effect from 1 October 2012.

The Treasury note that, at the EU level, work is underway on a new Money Laundering Directive.  There will inevitably be further amendments to the UK regulations in consequence of that.  So some changes which were being considered have been held over for further consideration at that stage.

Perhaps most interest, for accountants in practice, will centre on changes which the government has considered but decided NOT to make.  So, for example, the government does NOT now propose to remove the criminal penalties for non-compliance with the MLR 2007.  Also the government does NOT propose to exempt very small accountancy, book-keeping and other businesses from an obligation to comply with MLR 2007 (there had been some thought that perhaps part-time or semi-retired sole practitioners with fee income of only a few thousand pounds per annum might be exempted from the MLR).

What the government does propose is some tidying up of the regulations (most of which will not be relevant to accountants in practice).

Perhaps the most significant changes of interest to accountants in practice are that:

(a) In connection with 'reliance' under Reg 17 it will be permitted to rely on customer due diligence carried out by any firm which is itself subject to supervision by ANY body listed in Schedule 3 to the regulations (whereas currently this extends only to firms supervised by bodies in Part 1 of Schedule 3), and

(b) It will be expressly stated in the MLR that the record keeping requirements of Reg 19 apply to records of the identity of a beneficial owner of a customer as well as those relating to a customer.

These changes will be effected by minor amendments to the wording of Reg 17(2)(b)(ii), Reg 19(2)(a) and Sch 3.

There are also changes affecting supervisory bodies, for example to permit supervisory bodies to exchange relevant information between themselves.

It is also proposed that there should be changes to the matters which HMRC may take into account when deciding if individuals connected with a 'money service business' or 'trust and company service provider' are 'fit and proper' persons (generally in relation to past criminal convictions).

All in all though I do not think accountants in practice will regard these proposed changes to the MLR 2007 as earth shattering - and I expect there will be some who think that an opportunity to ease unnecessary burdens has been missed.

David

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davidwinch's picture

Update

davidwinch | | Permalink

For an update on this see my blog post.

In particular the amendment to the wording of the record keeping requirements in relation to beneficial owners (mentioned above) was NOT, in the event, made.

David

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