UK: The Money Laundering and Terrorist Financing (Amendment) Regulations 2022

The Money Laundering and Terrorist Financing (Amendment) Regulations 2022 were made earlier this week and come into force on 9 March 2022: see here or here (pdf). The explanatory memorandum, available here (pdf), states: "These Regulations update the existing United Kingdom anti-money laundering legislation to make minor amendments concerning the UK’s register of express trusts. The main changes are made in order to extend the deadlines imposed on trustees for registering and updating information on the register, and also to amend the categories of trusts which are required to register" (paras. 2.1 and 2.2).

UK: The Sanctions and Anti-Money Laundering Act 2018 (Commencement No. 2) Regulations 2020

The Sanctions and Anti-Money Laundering Act 2018 (Commencement No. 2) Regulations 2020 were made yesterday: see here or here (pdf). The Regulations bring into force certain provisions of the Sanctions and Anti-Money Laundering Act 2018 when the transition period ends; they also bring into force, today, section 51 ("Public registers of beneficial ownership of companies registered in British Overseas Territories"). Section 51 requires, amongst other things, that the Secretary of State should, no later than 31 December 2020, prepare a draft Order in Council requiring the government of any British Overseas Territory that has not introduced a publicly accessible register of the beneficial ownership of companies within its jurisdiction to do so. Other provisions are brought into force on IP completion date.

UK: The Money Laundering and Terrorist Financing (Amendment) Regulations 2019

I noted, earlier this year, that the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 were made last year: see here. I noted, too, that the changes being introduced by the new regulations were the subject of a consultation for which the Government's formal response had not yet been published. The response is now available: see here (pdf).

UK: The Money Laundering and Terrorist Financing (Amendment) Regulations 2019

The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 were made on 20 December: see here. The accompanying explanatory memorandum is available here (pdf) and a shorter explanatory note is available here. Regulation 1(2) provides that the regulations will come into force later this week on January 10, with the exception of regulations 5(5)(c), 6 and 12(b). The regulations make amendments to the UK anti-money laundering framework arising from the amendments made to the fourth anti-money laundering directive (2015/849/EU) by the fifth anti-money laundering directive (2018/843/EU). These amendments will see the expansion of the UK's framework to include new businesses and activities, particularly concerning crypto-assets.

The changes being made by the 2019 regulations were the subject of a consultation last year: see here. Although the regulations have now been made, the Government's formal response to the consultation has not been published. The explanatory memorandum accompanying the regulations states, however, that "[the] government will soon publish its formal response ... This response document will summarise the stakeholder responses submitted and set out the legislative changes and reasoning behind them" (para. 10.7).

UK: The Government's Economic Crime Plan 2019-2022

The Government has published its Economic Crime Plan 2019-2022: see here (pdf). The plan contains seven "strategic priorities", including "Transparency of Ownership". This part of the plan explains what the Government has already done, or what is subject to on-going consultation (including, for example, proposals to reform Companies House in the consultation Corporate Transparency and Register Reform - see here, pdf). With regard to the introduction of the new register of the beneficial owners of legal entities owning property in the UK, the plan states that a Bill will be introduced "early in the next Parliamentary session when Parliamentary time allows". The draft Bill received pre-legislative scrutiny earlier this year.

The UK's implementation of the Fifth Money Laundering Directive ((EU) 2018/843)), also known as 5MLD and the subject of a consultation earlier this year, is discussed as part of a strategic priority titled "Powers, Procedures and Tools". The plan states that the Directive will be transposed into national law by January 2020 and that the Government intends to go beyond the requirements of 5MLD by bringing a wider range of crypto-asset businesses within the anti-money laundering regime. The paper also states that those wanting access to the beneficial ownership information held on the expanded trusts register will need to demonstrate a "legitimate interest".

UK: Law Commission report - "Anti-money laundering: the SARs regime"

The Law Commission for England and Wales has published its report and recommendations concerning the regime for the reporting of suspicious activity within the UK's anti-money laundering and terrorist financing framework: see here (pdf). A summary is available here (pdf, English) and here (pdf, Welsh). The report contains 19 recommendations, including the creation of an advisory board with oversight over the drafting of guidance and responsibility for measuring the effectiveness of the reporting regime.

UK: Commons Treasury Committee launches economic crime inquiry

The House of Commons Treasury Committee has begun an inquiry exploring certain aspects of economic crime: see here. More specifically, there two broad areas for examination have been identified: (1) anti-money laundering and sanctions (including, for example, the scale of money laundering and the impact of the regulatory regime); (2) consumers and economic crime (including, for example, the effectiveness of financial institutions in combating economic crime and the security of consumer data).

UK: FRC publishes revised ISA (UK) 250 Section A - Consideration of laws and regulations in an audit

The Financial Reporting Council has published a revised edition of one of its auditing standards: ISA (UK) 250 Section A - Consideration of laws and regulations in an audit of financial statements. The revised standard - effective for audits of financial statements for periods commencing on or after 15 December 2017 - is available here (pdf). It includes a new appendix providing updated guidance on the auditor's responsibilities in respect of money laundering, terrorist financing and proceeds of crime legislation.

UK: HM Treasury consults on the anti-money laundering supervisory regime

HM Treasury has published a consultation paper concerning the creation of the new Office for Professional Body AML Supervision (OPBAS): see here. Draft Regulations have also been published: see here (pdf). HM Treasury would like to know, in particular, whether respondents believe that the Regulations are drafted so as to permit OPBAS to help (and ensure) professional body AML supervisors comply with their obligations; views are also sought on the likely impact of OPBAS on business.

FATF Guidance on transparency and beneficial ownership

The Financial Action Task Force has published Guidance on Transparency and Beneficial Ownership: see here (pdf). The Guidance is intended to assist countries in the design and implementation of measures that will deter and prevent the misuse of companies and other corporate vehicles for money laundering, terrorist financing and other illicit purposes.

Basel Committee publishes four consultation papers

At the end of last week the Basel Committee on Banking Supervision published three consultation papers. In the first, views are sought on the Committee's proposed guidelines Sound management of risks related to money laundering and financing of terrorism: see here (pdf). The second and third papers concern derivatives-related reforms to the capital adequacy framework: see here (pdf) and here (pdf). The fourth paper sets out revisions to the Basel III leverage ratio framework and disclosure requirements: see here (pdf).

Europe: protecting the financial system from money laundering and terrorist financing

The European Commission has published a proposal for a Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (see here, pdf) and a Regulation on the information accompanying transfers of funds (see here, pdf). These proposals are designed to improve the current legal framework governing money laundering and funds transfer and reflect recent FATF recommendations. For further information see: Commission press release | FAQs | Impact assessment: complete (pdf) and summary (pdf) |.

FATF Recommendations: International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation

At a plenary meeting last week the Financial Action Taskforce (FATF) approved a new edition of the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation, The FATF Recommendations: see here (pdf). The European Commission has announced that the changes made will be implemented in the European framework: see here.