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UK government transposes 5AMLD on time

Monday, 6 January, 2020

The UK government has enacted regulations bringing into force the EU Fifth Anti-Money Laundering Directive (5AMLD).

The provisions are contained in the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, laid before parliament on 19 December and enacted the following day. Most of them will come into effect on 10 January, the EU's official deadline for Member States to transpose 5AMLD into national legislation, although few other countries are ready to do so. Although the UK is due to leave the EU later this year, it has nevertheless agreed to transpose the Directive.

The effect of the order is to amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which implemented the EU Fourth Anti-Money Laundering Directive. They require 'relevant persons' to take stringent customer due-diligence measures, including checking the available company and trust registers for beneficial ownership information before establishing a business relationship with a new client. Anyone who spots a discrepancy between information they obtain from the client and the publicly available beneficial ownership information on the registers will have to report the anomaly to Companies House, subject to an exemption for legal professional privilege.

Crypto-assets, and those who deal in them, will also come under AML regulation, as will letting agencies, and works of art and culture objects worth more than EUR10,000.

The provisions relating to trust registration will be delayed until later in 2020, following a more detailed technical consultation on implementation. 5AMLD requires not just public access to the trust register, but also that it is extended from trusts with UK tax consequences to include all express trusts. This will extend the number of registrable trusts from around 200,000 to as many as two million.

HMRC stresses that the Trust Registration Service will have to contain a 'robust and proportionate framework', and the consultation will include additional information on the proposals for the type of express trusts that will be required to register; data collection and sharing provisions; and penalties.

Provisions in 5AMLD on customer due-diligence for anonymous pre-paid cards do not take effect until 10 July 2020. Provisions on the proposed 'bank account portal' take effect on 10 September 2020.

Sources