Learning Material Sample
Financial crime5. EU Money Laundering Directives
Prior to leaving the EU the UK enacted all the EU Money Laundering Directives (MLD) into UK law up to MLD 6. Now that the UK is no longer a member of the EU it has discretion as to whether it adopts future MLDs, in full or in part. Key points are:
Company directors and persons with significant control (anyone owning more than 25% of a company) has to be identified on a central register; in the UK this is held at Companies Hou... Shortened demo course. See details at foot of page. ...staff. This measure aims to ensure criminals convicted in “relevant areas” and those under investigation do not hold a management function.
A risk-based approach is taken and all firms are different. The main training staff need is what a firm actually produces in the way of policies and procedures. Written policies & procedures must be in place and may be checked by the relevant supervisory body. The MLD 5 came into force in the UK from January 2020, replacing MLD 4. The objectives were to improve transparency and the then current preventative framework to more effectively counter money laundering and terrorist financing across the EU.
Some of the key points: Obligated entities A number of additional entities were bought within the scope of AML legislation: Virtual (crypto) currency providers and custodian wallet providers Art traders (when the value of transactions or series of linked transactions amount to €10,000 or more); artists who sell their own work were subsequently de-scoped Those providing services similar to those of auditors, external accountants and tax advisors as a principal business or as a professional activity Estate agents who act as intermediaries in the letting of property where the monthly rent is equivalent to €10,... Shortened demo course. See details at foot of page. ...l aliveCourt imposed trusts that do not pay tax Criminal injury compensation trusts for bereaved children up to age 25 Charitable trusts registered with the Charities Commission More information and registration is available at gov.uk/guidance/manage-your-trusts-registration-service National Register of bank account ownership Extended the information required to be held in the register. For the UK financial services firm, it is unlikely that any of these things will affect day to day business, but firms need to be aware that extra scrutiny is required for any one of: Complex transactions Unusually large transactions An unusual pattern of transactions Transactions without apparent economic of lawful purpose Otherwise most of the provisions are around high-risk jurisdictions and therefore usually irrelevant to firms that conduct business solely within the UK. This Act created an offence of "failing to prevent" tax evasion.
One key thing is that an offence is created where a company fails to prevent its "associated persons" from facilitating tax evasion by a third party and it is world-wide in application. It includes companies incorporated in the UK and also overseas companies that do business in the UK or whose "associated persons" do business in the UK. Companies or partnerships (firms) are liable for failing to prevent tax evasion if it is co... Shortened demo course. See details at foot of page. ...ommitment to preventionBroadcasted ethical policies Contractual clauses around reporting concerns and not engaging Training Safe whistle blowing procedure Monitoring and enforcing preventative measure Regular risk assessments & reviews Other provisions of the Act are: Unexplained wealth orders can be served on individuals Increased investigative powers around money laundering and terrorist finance Information disclosure orders Recovery of the proceeds of crime – improved measures They were introduced to ensure that the UK continues to meet international standards with regard to acting against money laundering and terrorist financing. A number of aspects of AML legislation were amended:
In addition to requirements in respect of AML, Trust or service company providers are required to mitigate proliferation financing; the provision of funds or financial services for use in the manufacture, acquisition... Shortened demo course. See details at foot of page. ...ontrol’ of an FCA registered crypto-asset firm is required to receive prior approval from the FCAThe Money Laundering and Terrorist Financing (amendment) Regulations 2023 took effect from 10 January 2024, introducing measures that streamlined customer due diligence in respect of politically exposed persons. Give three examples of ‘associated persons’ of a company. Answer : Purchase course for answer |
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