UK amended anti-money laundering legislation to adopt EC’s “Fifth Money Laundering Directive” (“5AMLD”) into UK law as “MLR 2019”. Accordingly, UK’s new legislation, coming into force on January 10th 2020, amends; “Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017” (“MLR 2017”), the Terrorism Act 2000, the Proceeds of Crime Act 2000 and the Companies Act 2006.
Under the MLR 2019, the scope of persons and firms subject to MLR 2017 has expanded to include; tax advisers, lettings agents, art market participants, crypto asset exchange providers, custodian wallet providers. The reforms mainly bring following changes:
Where a firm has not been able to identify the UBO of a client which is a body corporate, the firm must take reasonable measures to verify the identity of the senior person in the body corporate responsible for managing it and keep records of actions taken and difficulties encountered.
Before forming a business relationship with a limited company, LLP or certain types of trusts, firms must check details in the PSC Register PSCs in Companies House. Firms will be required to collect proof of registration report discrepancies between the information on Companies House and the beneficial ownership information they receive.
The MLR 2019 expressly confirm that electronic ID verification from independent and reliable sources is acceptable for Client Due Diligence purposes if it is free from fraud and provides sufficient assurance as to the identity of the individual.