There are noteworthy changes to the UK's money laundering regulations (MLRs) some of which are summarised in this post for information purposes. Unusually, these include obligations on customers with accounts in which money is pooled (in addition to the regulated firm providing the 'pooled' or 'segregated' account). Let me know if you need advice.
- Monetary amounts are now in GBP on a 1:1 basis, so those thresholds/limits increase (since €10k is about £8,600 at time of posting), except where that would risk failing to meet the Financial Action Task Force (“FATF”) recommendations.
- The practice of selling “off-the-shelf" companies is now among the activities that render the provider of such a service a “trust or company service provider”; and it is considered to be an act that establishes a 'business relationship', thereby triggering the need for KYC etc.
- Any firm subject to the MLRs who provides a customer with a "pooled account" must undertake additional customer due diligence measures to understand the purpose and determine/address the risk of money laundering/terrorist financing. Unusually, a customer who receives a pooled account must maintain written records for 5 years, and provide information to the account provider and the authorities on request, in respect of the pooled account. Such an obligation obviously assists the account provider and authorities; and a breach of these obligation by the customer would provide a basis for the suspension or closure of the account. However, these obligations do not seem to be 'relevant requirements' for the purpose of determining offences under the MLRs.
- The customer due diligence (CDD) transaction-based triggers for 'letting agents' and 'art market participants' are now the same as those for 'high value dealers' (£10k).
- Banks who take on customers from an insolvent bank can allow those customers to open an account and transact from it prior to completing CDD measures (including enhanced due diligence (EDD), where relevant) other than identifying the customer or person purporting to act on the customer’s behalf (and verifying that such person is authorised to act); while the need to verify the identity and report discrepancies in the registers related to such customers are disapplied.
- The definition of “high-risk third country” has been replaced by “FATF call for action country”.
- Cryptoasset businesses must conduct EDD in relation to their "correspondent relationships" (specifically defined for this purpose, as opposed to the existing "correspondent relationship" for credit/financial institutions), consistent with FATF recommendations.
- Trusts which acquired an interest in UK land before 6th October 2020 and continue to hold that interest on 30 June 2026 must register with HMRC (other than 22 excluded trusts), but a liability to pay Stamp Duty Reserve Tax (SDRT) will not result in a trust becoming a 'taxable trust' that must be registered.
- The MLRs are now aligned with the new FCA regime for cryptoassets, so that a cryptoasset exchange or custodian wallet provider that is registered under the MLRs before 25th October 2027 must also give notice of a change of control within the meaning of Financial Services and Markets Act 2000 (FSMA).
This post is for information purposes. If you need advice, please let me know.
