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10/10/01/2020

Money laundering and terrorist financing regulations amended

Subject: Anti-money laundering, counter-terrorism and financial sanctions legislation

Sources: GOV.UK; Financial Conduct Authority

The Money Laundering Regulations(i) (‘MLR’) have been amended(ii) with effect from 10 January 2020. Key changes for HMRC customers include:

* the ‘high value dealers’ etc. category is extended to include ‘art market participants’ who deal in works of art and the value of the transaction, or a series of linked transactions, amounts to 10,000 euros or more; existing art market participants not already registered under the MLR may apply for registration to HM Revenue & Customs (‘HMRC’) via the online system from 10 January 2020 and must to trade lawfully be registered by 10 January 2021;

* the ‘estate agents’ category is extended to ‘letting agents’ who arrange the letting of properties for a term of a month or more at a monthly rent of 10,000 euros or more; existing letting agents may apply for registration to HMRC via the online system from May 2020 and must to trade lawfully be registered by 10 January 2021;

* ‘cryptoasset exchange providers’ and ‘custodian wallet providers’ i.e. providers of exchanges or custodian services for ‘cryptoassets’ (defined as a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored or traded electronically) are now subject to the MLR; existing providers must submit a completed application for registration via Connect by June 2020 and must to trade lawfully be registered with the Financial Conduct Authority by 10 January 2021;

* money service businesses and trust or company service providers who apply to register from 10 January 2020 will not be able to carry out relevant activity until HMRC has determined their application for registration;

* the ‘customer due diligence’ requirements on MLR regulated businesses have been extended in a number of respects including among others:

- measures to be taken to understand the ownership and control structure of persons, trusts and companies as a customer and to verify the identity of senior managing officials responsible for managing corporate bodies;

- a requirement to check trust and company beneficial ownership registers before establishing a business relationship, and to report any discrepancies found to the Registrar of Companies.

Notes:

(i) The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017 No. 692).

(ii) by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (SI 2019 No. 1511).

 

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