Changes to Money Laundering Regulations Announced


In July 2012, HM Treasury announced proposed changes to the Money Laundering Regulations 2007 (SI 2007/2157) and published the government's response to its June 2011 consultation on the Regulations.

The government stated that its proposed changes were aimed at reducing the regulatory burden imposed by the Regulations, strengthening the overall anti-money laundering (AML) regime and making the UK's AML regime more effective and proportionate.

Among the specific changes which will be introduced with effect from October 1, 2012 are the following:

  • Extending the types of firms that can be relied on to conduct customer due diligence by removing the current distinction between bodies listed in Parts 1 and 2 of the Regulations for customer due diligence reliance purposes. 
  • Permitting debt purchasers to rely on customer due diligence carried out by consumer credit financial institutions. 
  • Strengthening and clarifying the powers of the the Office of Fair Trading and HM Revenue and Customs. 
  • Introducing an information-sharing “gateway” for supervisors (including the Financial Services Authority and the Office of Fair Trading ). 
  • Formally appointing the Financial Servises Authority as the recognised AML supervisor for recognised investment exchanges.

Following the consultation process, the government has decided not to introduce a de minimis exclusion for small businesses and has also decided not to decriminalize certain AML breaches by making them subject only to a civil penalty regime.

Certain further changes are subject to proposed revisions to the European Union Third Money Laundering Directive (2005/60/EC) (MLD3). The government will provide an update on the revisions to MLD3, together with resulting proposed changes to the Regulations “in due course”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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