All gambling operators have a statutory duty to keep financial crime out of gambling. The Proceeds of Crime Act 2002 (POCA) obligates gambling operators to be alert to customers who try to gamble unlawfully acquired money. Money laundering includes both using illegal cash to clean the money as well as simply using it to fund gambling.
Money laundering risks are not only found in the operator-to-customer relationship, however. They can also occur in business-to-business relationships, as well as with any third parties operators contract with.
Details of the extension of the trust registration service under the Fifth Directive
On 24 January 2020, HMRC launched their promised technical consultation on changes to the Trust Registration Service (TRS) to be made under the Fifth Anti-Money Laundering Directive.
The changes will focus on the registration requirements of all UK and many non-EU resident express trusts, whether or not they incur a UK tax consequence. This could extend the number of registrable trusts from around 200,000 to over two million.
The Fifth Money Laundering Directive comes into force on 10 January 2020. All VinciWorks courses have been automatically updated to ensure that they reflect the latest regulations across all relevant jurisdictions.
There is no technical impact for any of our existing clients whether on the LMS or SCORM.
All course enrolments, both in-progress and all new enrolments will be updated for the Fifth Directive.
After an extensive review of the new regulations, we have concluded that the training impact for most regulated businesses in the UK is minor. As a vanguard in the fight against money laundering and terrorist financing, the UK already implemented many of the provisions of the Fifth Directive in 2017. For example, the Fifth Directive requires enhanced due diligence for transactions involving high-risk countries, a requirement that already exists in the Money Laundering Regulations 2017. The Fifth Directive also introduces new requirements for cryptocurrency, letting agents and art dealers but these requirements do not affect most regulated businesses.
From 10 January 2020, the Fifth Anti-Money Laundering Directive (2018/843) is in force in the UK and around the European Union. The changes are not as extensive as those that were introduced in the Fourth Directive, such as the concept of risk based due diligence, but the Fifth Directive will impact an increasing number of businesses who must now have regard to money laundering laws.
What is Ultimate Beneficial Ownership?
A beneficial owner is any person controlling or owning more than 25% of the shares or voting rights. The details of beneficial owners must be recorded and held on a central register accessible to competent authorities. Ultimate beneficial owner refers to someone who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. An ultimate beneficial owner (UBO) is always a natural person.
On 10 January 2020 the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 came into force. This statutory instrument updates the UK’s existing anti-money laundering legislation to take into account the Fifth Directive.
The 2019 Regulations amend:
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs)
From 10 January 2020, the Fifth Anti-Money Laundering Directive (2018/843) is in force in the UK and around the European Union. The changes are not as extensive as those that were introduced in the Fourth Directive, such as the concept of risk-based due diligence, but the Fifth Directive will impact an increasing number of businesses, such as art dealers and cryptocurrency companies who must now have regard to money laundering laws.
Businesses, such as law firms, banks, accounting firms, FCA regulated companies and estate agents who already have AML procedures in place will likely need to make only small modifications to their procedures.
Training plan recommendation
VinciWorks does not recommend that companies or law firms that regularly train on AML (every 12–18 months) make any significant changes to their training schedule because of the new directive.
The UK is obligated to transpose Directive (EU) 2018/843, commonly known as the Fifth Money Laundering Directive (5MLD), into national law by 10 January 2020. Despite Brexit and the flexible date of Britain leaving the EU, the terms of the implementation of 5MLD are set out in the Withdrawal Agreement between the UK and European Commission. Even if such an agreement doesn’t end up being the foundation of Brexit, the 5th Directive will need to become law in the UK.
In April 2019, the UK government launched its consultation on transposing the Fifth Directive into UK law. It contains a number of important expected changes and additional obligations all compliance officers should know about. For those who wish to respond, the consultation is running until 10 June 2019.
Here, we provide a comprehensive accounting of all the key changes compliance officers should know about the Fifth Directive.
The Fifth Money Laundering Directive is set to be transposed into national law by 10 January 2020. The core aim of the 5MLD is to address modern-day money laundering concerns that were not covered in the Fourth Directive. The main changes are focused on enhanced powers for direct access to information and increased transparency around beneficial ownership information and trusts. One of the challenges surrounding money laundering, which was far less of a risk when the Fourth Directive was being drafted, is cryptocurrencies.
What are cryptocurrencies?
A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Today there are over 3,000 cryptocurrencies across the world, with Bitcoin being the first one to enter the market and the clear market leader.
The SRA announced earlier this year that it would be launching a crackdown against firms who fall foul of money laundering procedures.
As an initial assessment, the SRA wrote to a sample of 400 out of the approximately 7,000 SRA-regulated firms required to comply with the Money Laundering Regulations 2017, asking them to demonstrate compliance with the regulation. The SRA was mainly checking that firms have a money laundering risk assessment and implementation plan in place. The assessment came in response to an increase in dirty money entering the UK and a lack of reporting of suspicious activity by lawyers and accountants, with lawyers often seen as an easy target for laundering money.