Money Laundering Regulations
From CrimeLine from Andrew Keogh
Money Laundering Regulations 2007
- Statutory Instrument 2003 No. 3075 The Money Laundering Regulations 2003
- Statutory Instrument 2006 No. 308 The Proceeds of Crime Act 2002 and Money Laundering Regulations 2003 (Amendment) Order 2006
- Statutory Instrument 2006 No. 308 The Proceeds of Crime Act 2002 and Money Laundering Regulations 2003 (Amendment) Order 2006
- MONEY LAUNDERING REGULATIONS 2003 - GUIDANCE FOR THE BAR
- Bowman v Fels [2005 EWCA Civ 226 (08 March 2005)]
- The SARs Review March 2006
- The Third EU Directive (MLD3) The THIRD EU Money Laundering Directive (required to be reflected in new UK legislation by December 2007)
- PART 7 MONEY LAUNDERING Proceeds of Crime Act 2002
Contents |
MONEY LAUNDERING REGULATIONS 2003
The Money Laundering Regulations 2003 (MLR 2003) define the activities falling within the 'regulated sector' covered by the regulations and set out the requirements for organisations having activities within the regulated sector.
The regulations require the appointment of a Money Laundering Reporting Officer (MLRO), training of relevant staff, verification of the identity of new clients, recording of transactions undertaken and identification obtained, internal reporting and other procedures.
Activities within the regulated sector include legal services involving financial or real property transactions (but not criminal or civil litigation).
With effect from 15 December 2007 the Money Laundering Regulations 2007 come into effect, replacing the 2003 Regulations.
The 2007 Regulations place additional responsibilities upon businesses in the 'regulated sector'. The Law Society has published extensive guidance in this connection which is accessable at http://www.lawsociety.org.uk/productsandservices/practicenotes/aml.page
Implementation of EU Third Money Laundering Directive
Directive 2005/60/EC of the European Parliament and of the Council formally adopted on 20 September 2005, on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (the “Third EU Money Laundering Directive”), was published in the Official Journal L 309 of 25 November 2005. Member states have two years to adopt and bring into force appropriate implementing measures - the implementation deadline is 15 December 2007. This new Directive will repeal and replace the existing 1991 Directive (as amended in 2001).
A copy of the Directive as published in the Official Journal is available here.
Identifying the beneficial owner
More detail on identifying the beneficial owner is proposed. The beneficial owner is the person who ultimately has ownership and control of the customer or person on whose behalf the activity or transaction is being conducted.
- For wills and intestacies, government is proposing to recognise this area as low risk, which will have an impact on the extent of identification and verification checks.
- For jointly-owned land, solicitors and others in the regulated sector will need to identify and verify, on a risk-sensitive basis, the client and any possible beneficiaries.
- For express trusts, the government is proposing that solicitors take measures to establish and verify the identity of the beneficiaries of the trust. Where it is not possible to identify the beneficiaries at the start of the business relationship, it is sufficient to identify the class of beneficiaries.
- For discretionary trusts, where the individuals that benefit from the trust have yet to be determined, it will be sufficient to identify the class of persons in whose interest the arrangement is set up or operates.
Read more Law Society: Monday 07 August 2006.
Legal opinion supports Society’s call for better regulations
Tuesday 03 April 2007
The Law Society has sent leading counsels' Opinion to the Treasury, strongly urging the government to change the definition of beneficial ownership in the current draft money laundering regulations. The move follows the government's continued refusal to review the definition, despite repeated expert advice from the Society. We have also submitted our formal response to the Treasury's consultation on the regulations.
The Opinion from Rabinder Singh QC and Alex Bailin, eminent counsel from Matrix Chambers, reinforced our argument that the current definition is so unclear as to be unworkable. It was sought on the constitutional and human rights implications of this lack of clarity. It makes clear that the regulations are in breach of community law, common law and the EC human rights requirements of legal certainty, by attaching criminal sanctions to inherently unclear obligations. Also, guidance would be unable to correct this lack of clarity; as such an attempt would mean that the guidance was taking the place of legislation, which would be unconstitutional. Approval of such guidance by the Treasury would not alter this position…….Read more
