Money laundering and terrorist financing
The money laundering rules are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists. The money laundering and terrorist financing (amendment) regulations 2019 (MLRs) came into force on 10 January 2020. This updates the existing regulations to incorporate international standards set by the Financial Action Task Force (FATF) and to comply with the EU’s 5th Money Laundering Directive.
The key changes for businesses dealing with HMRC mean that money service businesses and trust or company service providers who apply to register from 10 January 2020, will not be able to carry out relevant activity until HMRC has determined their application for registration.
HMRC will now supervise two new groups of businesses that are subject to the new anti-money laundering regulations.
Firstly, letting agents who rent out property valued at 10,000 euros or more for a minimum of one calendar month, including both commercial and residential property – the online system for these letting agency businesses to register will open in May 2020.
Secondly, those in the art market who deal in in sales, purchases, and storage of works of art with a value of 10,000 euros or more, whether this is for a single transaction or series of linked transactions, regardless of payment method used – art market participants can register now via the online system. Businesses must register by 10 January 2021. The changes also add more categories within the scope of the anti-money laundering regulatory framework.