The Money Laundering Regulations 2007

Publication Date:January 01, 2007
 
FREE EXCERPT

2007No. 2157

FINANCIAL SERVICES

The Money Laundering Regulations 2007

24thJuly2007

25thJuly2007

15thDecember2007

CONTENTS

PART 1

GENERAL

1. Citation, commencement etc.

2. Interpretation

3. Application of the Regulations

4. Exclusions

PART 2

CUSTOMER DUE DILIGENCE

5. Meaning of customer due diligence measures

6. Meaning of beneficial owner

7. Application of customer due diligence measures

8. Ongoing monitoring

9. Timing of verification

10. Casinos

11. Requirement to cease transactions etc.

12. Exception for trustees of debt issues

13. Simplified due diligence

14. Enhanced customer due diligence and ongoing monitoring

15. Branches and subsidiaries

16. Shell banks, anonymous accounts etc.

17. Reliance

18. Directions where Financial Action Task Force applies counter-measures

PART 3

RECORD-KEEPING, PROCEDURES AND TRAINING

19. Record-keeping

20. Policies and procedures

21. Training

PART 4

SUPERVISION AND REGISTRATION

Interpretation22 Interpretation

Supervision23. Supervisory authorities

24. Duties of supervisory authorities

Registration of high value dealers, money service businesses and trust or company service providers25. Duty to maintain registers

26. Requirement to be registered

27. Applications for registration in a register maintained under regulation 25

28. Fit and proper test

29. Determination of applications under regulation 27

30. Cancellation of registration in a register maintained under regulation 25

Requirement to inform the Authority31. Requirement on authorised person to inform the Authority

Registration of Annex I financial institutions, estate agents etc.32. Power to maintain registers

33. Requirement to be registered

34. Applications for and cancellation of registration in a register maintained under regulation 32

Financial provisions35. Costs of supervision

PART 5

ENFORCEMENT

Powers of designated authorities36. Interpretation

37. Power to require information from, and attendance of, relevant and connected persons

38. Entry, inspection without a warrant etc.

39. Entry to premises under warrant

40. Failure to comply with information requirement

41. Powers of relevant officers

Civil penalties, review and appeals42. Power to impose civil penalties

43. Review procedure

44. Appeals

Criminal offences45. Offences

46. Prosecution of offences

47. Offences by bodies corporate etc.

PART 6

MISCELLANEOUS

48. Recovery of charges and penalties through the court

49. Obligations on public authorities

50. Transitional provisions: requirement to be registered

51. Minor and consequential amendments

SCHEDULE 1-

ACTIVITIES LISTED IN POINTS 2 TO 12 AND 14 OF ANNEX I TO THE BANKING CONSOLIDATION DIRECTIVE

SCHEDULE 2-

FINANCIAL ACTIVITY, SIMPLIFIED DUE DILIGENCE AND POLITICALLY EXPOSED PERSONS

SCHEDULE 3-

PROFESSIONAL BODIES

SCHEDULE 4-

CONNECTED PERSONS

SCHEDULE 5-

MODIFICATIONS IN RELATION TO APPEALS

SCHEDULE 6-

MINOR AND CONSEQUENTIAL AMENDMENTS

The Treasury are a government department designated 1 for the purposes of section 2(2) of the European Communities Act 1972 2 in relation to measures relating to preventing the use of the financial system for the purpose of money laundering;

The Treasury, in exercise of the powers conferred on them by section 2(2) of the European Communities Act 1972 and by sections 168(4)(b), 402(1)(b), 417(1) 3 and 428(3) of the Financial Services and Markets Act 2000 4, make the following Regulations:

PART 1

GENERAL

Citation, commencement etc.

1.-

(1) These Regulations may be cited as the Money Laundering Regulations 2007 and come into force on 15th December 2007.

(2) These Regulations are prescribed for the purposes of sections 168(4)(b) (appointment of persons to carry out investigations in particular cases) and 402(1)(b) (power of the Authority to institute proceedings for certain other offences) of the 2000 Act.

(3) The Money Laundering Regulations 2003 5 are revoked.

Interpretation

2.-

(1) In these Regulations-

"the 2000 Act" means the Financial Services and Markets Act 2000;

"Annex I financial institution" has the meaning given by regulation 22(1);

"auditor", except in regulation 17(2)(c) and (d), has the meaning given by regulation 3(4) and (5);

"authorised person" means a person who is authorised for the purposes of the 2000 Act 6;

"the Authority" means the Financial Services Authority;

"the banking consolidation directive" means Directive 2006/48/EC of the European Parliament and of the Council of 14th June 2006 relating to the taking up and pursuit of the business of credit institutions 7;

"beneficial owner" has the meaning given by regulation 6;

"business relationship" means a business, professional or commercial relationship between a relevant person and a customer, which is expected by the relevant person, at the time when contact is established, to have an element of duration;

"cash" means notes, coins or travellers' cheques in any currency;

"casino" has the meaning given by regulation 3(13);

"the Commissioners" means the Commissioners for Her Majesty's Revenue and Customs;

"consumer credit financial institution" has the meaning given by regulation 22(1);

"credit institution" has the meaning given by regulation 3(2);

"customer due diligence measures" has the meaning given by regulation 5;

"DETI" means the Department of Enterprise, Trade and Investment in Northern Ireland;

"the electronic money directive" means Directive 2000/46/EC of the European Parliament and of the Council of 18th September 2000 on the taking up, pursuit and prudential supervision of the business of electronic money institutions 8;

"estate agent" has the meaning given by regulation 3(11);

"external accountant" has the meaning given by regulation 3(7);

"financial institution" has the meaning given by regulation 3(3);

"firm" means any entity, whether or not a legal person, that is not an individual and includes a body corporate and a partnership or other unincorporated association;

"high value dealer" has the meaning given by regulation 3(12);

"the implementing measures directive" means Commission Directive 2006/70/EC of 1st August 2006 laying down implementing measures for the money laundering directive 9;

"independent legal professional" has the meaning given by regulation 3(9);

"insolvency practitioner", except in regulation 17(2)(c) and (d), has the meaning given by regulation 3(6);

"the life assurance consolidation directive" means Directive 2002/83/EC of the European Parliament and of the Council of 5th November 2002 concerning life assurance 10;

"local weights and measures authority" has the meaning given by section 69 of the Weights and Measures Act 1985 11 (local weights and measures authorities);

"the markets in financial instruments directive" means Directive 2004/39/EC of the European Parliament and of the Council of 12th April 2004 12 on markets in financial instruments;

"money laundering" means an act which falls within section 340(11) of the Proceeds of Crime Act 2002 13;

"the money laundering directive" means Directive 2005/60/EC of the European Parliament and of the Council of 26th October 2005 14 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing;

"money service business" means an undertaking which by way of business operates a currency exchange office, transmits money (or any representations of monetary value) by any means or cashes cheques which are made payable to customers;

"nominated officer" means a person who is nominated to receive disclosures under Part 7 of the Proceeds of Crime Act 2002 15 (money laundering) or Part 3 of the Terrorism Act 2000 16 (terrorist property);

"non-EEA state" means a state that is not an EEA state;

"notice" means a notice in writing;

"occasional transaction" means a transaction (carried out other than as part of a business relationship) amounting to 15,000 euro or more, whether the transaction is carried out in a single operation or several operations which appear to be linked;

"the OFT" means the Office of Fair Trading;

"ongoing monitoring" has the meaning given by regulation 8(2);

"regulated market"-

(a) within the EEA, has the meaning given by point 14 of Article 4(1) of the markets in financial instruments directive; and(b) outside the EEA, means a regulated financial market which subjects companies whose securities are admitted to trading to disclosure obligations which are contained in international standards and are equivalent to the specified disclosure obligations;

"relevant person" means a person to whom, in accordance with regulations 3 and 4, these Regulations apply;

"the specified disclosure obligations" means disclosure requirements consistent with-

(a) Article 6(1) to (4) of Directive 2003/6/EC of the European Parliament and of the Council of 28th January 2003 17 on insider dealing and market manipulation;(b) Articles 3, 5, 7, 8, 10, 14 and 16 of Directive 2003/71/EC of the European Parliament and of the Council of 4th November 2003 18 on the prospectuses to be published when securities are offered to the public or admitted to trading;(c) Articles 4 to 6, 14, 16 to 19 and 30 of Directive 2004/109/EC of the European Parliament and of the Council of 15th December 2004 19 relating to the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market; or(d) Community legislation made under the provisions mentioned in sub-paragraphs (a) to (c);

"supervisory authority" in relation to any relevant person means the supervisory authority specified for such a person by regulation 23;

"tax adviser" (except in regulation 11(3)) has the meaning given by regulation 3(8);

"terrorist financing" means an offence under-

(a) section 15 (fund-raising), 16 (use and possession), 17 (funding arrangements), 18 (money laundering) or 63 (terrorist finance: jurisdiction) of the Terrorism Act 2000;(b) paragraph 7(2) or (3) of Schedule 3 to the Anti-Terrorism, Crime and Security Act 2001...

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