Upcoming changes to the UK’s anti-money laundering regime – Part 1
In July 2021, HM Treasury launched a new AML consultation entitled ‘Amendments to the Money Laundering Terrorist Financing and Transfer of Funds Regulations 2017’. This consultation outlined ways in which the government intended to amend the UK’s money laundering regulations (MLRs) with several time-sensitive updates. The planned updates are required to ensure that the UK continues to meet international AML standards, whilst also clarifying how the UK’s anti-money laundering and counter-terrorist financing (AML/CTF) regime works.
The changes to the MLRs have been made through draft secondary legislation entitled ‘the Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022’. Most of the measures in this SI will come into force on 1 September 2022, subject to parliamentary approval
In this series of blog posts, we take a closer look at what these changes will mean for anti-money laundering compliance.
Account Information Service Providers (ASIPs) and Payment Initiation Service Providers (PISPs)
The government has decided to take AISPs out of the regulated sector but keep PISPs in for now. This is due to a high number of stakeholder responses which raise concerns that PISPs, unlike AISPs, are involved in payment chains and therefore may represent a higher risk of being used as a tool for economic crime in a broader sense (i.e. fraud).
Bill Payment Service Providers (BPSPs) and Telecoms, Digital and IT Payment Service Providers (TDITPSPs)
Removing these businesses from the scope of MLRs could result in a heightened risk of fraud. In the consultation, there were no significant drawbacks to keeping these businesses within the scope of the MLRs since early analysis suggested it was highly unlikely that any business in the UK truly operates as a BPSP.
The government has decided for the time being to keep BPSPs and TDITPSPs in the scope of MLRs.
Art Market Participants
The government has decided to amend the definition of an AMP in Regulation 14(1)(d) to explicitly exclude from scope artists who sell their own works of art over the EUR 10,000 threshold. This exemption will apply whether the artist sells their works of art as an individual or through a company or partnership where they are a shareholder or partner. HMRC will keep this under review.
There was also a question about whether to expand the definition of AMPs in MLRs to digital art, Non-Fungible Tokens (NFTs), antiques and antiquities. The government said they will take these and related questions into consideration in the course of further work to consider possible future changes to the definition.
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