MLR amendments made

The Money Laundering and Terrorist Financing (Amendment)(No 2) Regulations 2022 were made on 21 July. The changes implement Treasury’s conclusions following its consultation and will mainly take effect from 1 September, except that:

  • the changes that give power to amend the current MLRs and the new provisions on changes of control of crypto-asset providers come into force 21 days after the Regulations are made;
  • the provisions on crypto-asset transfers take effect on 1 September 2023; and
  • the changes to the requirements on reporting material discrepancies and changes to primary legislation take effect on 1 April 2023.

As a reminder the key changes:

  • change the definition of “business relationship” in relation to trust and company service provision to include formation of limited partnerships, and to state that this will be treated as a business relationship regardless of whether it is expected to have an element of duration;
  • add a new section on information accompanying crypto-asset transfers with several new defined terms also added;
  • add requirements for risk assessments on proliferation financing;
  • amend the scope of the MLRs to exclude artists or the entities they work through for selling their own work;
  • amend the requirements on reporting material discrepancies between registers and information received to take account of the new requirements on overseas entities, and describing what a material discrepancy is;
  • removing part 5A from the current regulations given the decision not to proceed with the register of accounts and safe-deposit boxes;
  • applying the FSMA provisions on change in control (with some adaptation) to registered crypto-asset exchange providers and registered custodian wallet providers;
  • modifying the reporting requirements for Annex 1 financial institutions to bring them into line with requirements for crypto businesses;
  • removing AISPs from scope


Emma Radmore