Improving the effectiveness of the Money Laundering Regulations

HM Treasury has published a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’), which place requirements onto a range of businesses to identify and prevent money laundering and terrorist financing.

HM Treasury committed to consulting on changes to the MLRs as part of a wider programme of work aimed at reducing money laundering, which was set out in the Economic Crime Plan 2023-26.

This consultation principally covers issues with the MLRs already identified by HM Treasury, for example in the 2022 Review of the UK’s anti-money laundering and counter-terrorist financing regulatory and supervisory regime. This review found that, while the core requirements of the regulations were mostly fit for purpose, there were potentially a number of technical changes that could be made to increase effectiveness and ensure proportionality for both regulated firms and customers.

The consultation also includes issues put forward by key stakeholders, such as the anti-money laundering/counter terrorist financing supervisors, the regulated industries and their representative bodies, which could reduce burdens and make the regulations more effective at tackling economic crime.

The consultation covers four core themes:

1. Making customer due diligence more proportionate and effective
2. Strengthening system coordination
3. Providing clarity on scope of the MLRs
4. Reforming registration requirements for the Trust Registration Service.

HM Treasury is keen to hear from a wide range of stakeholders in response to the consultation, including regulated businesses and their customers, supervisory bodies, law enforcement agencies, civil society organisations and members of the public. The consultation document sets out a number of ways to respond to the consultation. This includes answering the questions via the online ‘Improving the Effectiveness of the Money Laundering Regulations’ form.

Cost of Compliance Survey

In parallel with this consultation, HM Treasury is running a survey on the cost of compliance with the MLRs. This will help us to understand better how regulated businesses comply with the regulations and to assess the impact of future changes to the MLRs. We are keen to receive responses from a wide range of regulated businesses, including large firms, SMEs and sole traders. You can see and respond to the survey at the Cost of compliance with the Money Laundering Regulations - survey for regulated businesses.

Virtual events

While the consultation is open, HM Treasury is holding a series of virtual, working-level events to discuss the consultation with interested stakeholders. Please use the following links to sign up to a relevant event. You can contact anti-moneylaunderingbranch@hmtreasury.gov.uk with any questions.

• Firms regulated by the FCA (Financial Institutions), Tuesday 16 April 11am

• Firms regulated by HMRC and the Gambling Commission, Thursday 18 April 11am

• Businesses affected by access to pooled client accounts, Wednesday 24 April 2:30pm

• Firms regulated by a legal Professional Body Supervisor, Monday 29 April 2pm

• Firms regulated by an accountancy Professional Body Supervisor, Tuesday 30 April 11am

• Open Roundtable for all sectors and stakeholders, Tuesday 7 May 11am