On January 23, HM Treasury (HMT) published its response (the Response) to the Consultation on the Transposition into UK law of the EU’s Fifth Money Laundering Directive (the Consultation). The Consultation closed in June 2019.
The Fifth Money Laundering Directive (MLD5) is primarily focused on expanding the EU’s anti-money laundering (AML) regime into new areas such as crypto-assets and art dealers. It became operational in the UK on January 10 (for more information, please see the January 10 edition of Corporate & Financial Weekly Digest).
The purpose of the Response is to address comments and issues raised by respondents to the Consultation. In general, the respondents agreed with the Government’s proposals, but wanted to ensure that definitions are clear and specific, that disclosure requirements do not undermine data security, and that, as the AML regime is expanded to encompass lay trustees, art dealers and letting agents, these people are fully aware of their new responsibilities.
HMT also used the Response to emphasize the ongoing application of the obligations in MLD5 now that the UK has left the EU but for the remainder of 2020 remains subject to EU law (for more information on the ‘implementation period,’ please see the January 24 edition of Corporate & Financial Weekly Digest). While in the Response there is no discussion of what will happen after the end of the implementation period, in the Response HMT noted that:
“As a leading and founding member of the [Financial Action Task Force], the UK will remain at the forefront of international standards and respond to new threats… The government is committed to building on the progress already made in fighting economic crime and maintaining strong protections and standards against money laundering and terrorist financing.”
The Response is available here.
For more information on the work done by the Financial Action Task Force, or FATF, please see the July 12, 2019 edition of Corporate & Financial Weekly Digest.