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