New changes to the UK anti-money laundering laws came into force on the 10 January 2020. The changes update the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("the 2017 Regulations") to incorporate international standards set by the Financial Action Task Force (FATF) and to implement the EU's Fifth Money Laundering Directive (5MLD). The UK has implemented this into domestic law via the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 ('the 2019 Regulations').
The 2017 Regulations brought in significant changes to the AML regime including; extending the scope of Customer Due Diligence ('CDD') checks, introduced domestic PEPs (Politically Exposed Persons) and created a central register of beneficial ownership. The 5MLD builds upon these changes to better counter the financing of terrorism, and increase transparency in financial transactions. The amendments are based on the European Commission's 2016 Action Plan to plug the gap in the terrorist finance and anti-money laundering risks.
For most businesses subject to the 2017 Regulations, the changes will require updating their current policies and procedures. However, the 2019 Regulations have extended the scope to include businesses in sectors not previously regulated, no doubt causing significant changes to the way they operate. This article summarises the key changes: