As reported in issue 4 of Progreso, the new legal framework in the fight against money laundering was defined in Directive 2015/849 of the European Parliament and of the Council adopted on 20th May 2015.

When the EU regulation came into force on 26th June, the United Kingdom’s FCA published its Guidelines on handling Politically Exposed Persons (PEPs) in order to clarify the new MLR 2017 regulations “The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer)”, Regulations 2017 No. 692 which were passed to support the transposition of the Directive referred to above.

These regulations published by the United Kingdom replace those from 2007 on money laundering and transfer of funds.

Although the new regulations do not make significant changes to the system for preventing financial crime, some existing rules have been made tougher. Among the most important of these, and explained in the guidance, are the following:

• Trustees have greater information disclosure obligations
• The number of people exempted from the regulation’s scope of application have been reduced by changes to the definition of “occasionally or in a very limited manner”:

- Annual business turnover from financial activity must be under £100,000 (this figure was previously £64,000).

- Activity limited to transactions of under €1,000 per customer.

- Financial activities that are supplementary and directly related to the principal activity.

- Financial activity that is less than 5% of the natural or legal person’s total business turnover.

• A case-by-case risk assessment of PEPs is required, rather than a generic approach. The guidance sets indicators to mark the boundaries between lower and higher risk scenarios.
• Failure to comply with simplified due diligence for any transaction is no longer valid. Companies must proactively decide whether this simplified check is enough for a particular transaction or whether an enhanced assessment is necessary.

The earlier regulations have been reinforced in terms of the measures that those bound by the rules must adopt in order to meet their obligations in the area of financial crime.