A Step Towards New Money Laundering Regulations

  • By Mercia Group
  • 21 October 2016 00:00

September 2016 saw HM Treasury publish a consultation on the transposition of the Fourth (EU) Money Laundering Directive. You may recall that the Fourth Directive was published in June 2015 and will be implemented into UK law by 26 June 2017.

 

We have been waiting for some time now to see draft legislation in the form of new Money Laundering Regulations and whilst we are not there yet, this consultation does shed further light on the timetable of changes to come:

  • the consultation runs up to 10 November 2016;
  • submitted views will then be reviewed;
  • draft regulations will follow, with a further four week consultation period;
  • the Treasury will explain why it has reached its policy decisions in the government's response to this consultation;
  • final policy decisions will be implemented through the legislation that comes into force by June 2017.

When will changes to your anti-money laundering policies and procedures be required?

Within the consultation document, the government has stated that until Brexit negotiations are concluded, the UK remains a full member of the EU and, therefore, that EU legislation will be applied. The government intends therefore that new anti-money laundering provisions will come into force in the UK by 26 June 2017.

These will principally take the form of the Money Laundering and Transfer of Funds (Information on the Payer) Regulations 2017, which will replace the Money Laundering Regulations 2007 (and the Transfer of Funds Regulations 2007), with appropriate transitional provision.

It is not yet fully clear how soon before 26 June 2017 we will see the final new Regulations for implementation into your compliance procedures, but those with responsibilities in this area should potentially consider setting some time aside in the early part of 2017 for preparation.

What is likely to change?

Whilst the requirements of the Fourth Directive are known, the subject of this consultation details how aspects of these will be implemented in the UK.

The consultation itself has been broken down into 13 chapters. These set out current requirements, followed by the new EU requirements and the consultation questions the government would like opinions on. There are also a number of links to other documents that interested stakeholders are encouraged to read.

Whilst some of the changes in the Directive affect Member States as a whole, the consultation focuses on specific areas. In a recent newsletter sent out to Mercia's Money Laundering Compliance Manual subscribers, we highlighted those changes which are most likely to be of interest to auditors, accountants, tax advisors and their clients. To view a copy of this newsletter, please click here.

A copy of the full consultation can be found here.

You might also be interested in these articles…