The Money Laundering (Amendment) Regulations 2012 (revoked)

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Money Laundering Regulations 2007 (S.I. 2007/2157) (“the 2007 Regulations”). The 2007 Regulations implement in part Directive 2005/60/EC (OJ No L 309, 25.11.2005, p.15) of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

Regulation 3 excludes from the scope of the 2007 Regulations an undertaking which provides credit by allowing time to pay for services, where payment is made over a period of no more than 12 months. The definition of “estate agent” is amended, to include estate agents selling property outside the UK within the scope of the 2007 Regulations.

Regulation 4 replaces references to home information packs, which have been discontinued in England and Wales, with references to home reports in Scotland. The preparation of such reports is excluded from the scope of the 2007 Regulations, as was the preparation of home information packs.

Regulation 5 adds consumer credit financial institutions to the list of persons who may be relied upon for the purposes of carrying out customer due diligence under the 2007 Regulations, and provides that members of all professional bodies listed in Schedule 3 to those Regulations may now be relied upon for those purposes. Regulation 17 amends Schedule 3 accordingly.

Regulation 6 removes regulation 18 of the 2007 Regulations, which has been superseded by the provisions of Schedule 7 to the Counter-Terrorism Act 2008 (c.28). Regulations 14 and 16 make minor amendments consequential on regulation 6.

Regulation 8 adds a recognised investment exchange to the list of relevant persons supervised by the Financial Services Authority for the purposes of the 2007 Regulations. Regulation 7 inserts a definition of recognised investment exchange.

Regulation 9 introduces a power for supervisory authorities to share information with each other, subject to certain conditions.

Regulation 10 amends regulation 28 of the 2007 Regulations, which sets out the matters the Commissioners of Her Majesty's Revenue and Customs (“the Commissioners”) may take into account in deciding whether certain persons are “fit and proper” in order that a money service business or trust and company service provider may be registered for the purposes of the 2007 Regulations.

Regulations 11 and 12 clarify that registration may be cancelled by the Commissioners, the Financial Services Authority or the Office of Fair Trading if a relevant person who has been registered subsequently fails to meet the conditions for registration.

Regulation 13 amends regulation 37 of the 2007 Regulations, which provides a power for an enforcement officer to require information from, and attendance of, relevant and connected persons, to clarify that the power may be exercised in respect of persons who are believed to be, or reasonably suspected of being, a relevant person for the purposes of the 2007 Regulations.

Regulation 14 provides a power for enforcement authorities to impose a fine on persons who fail to comply with the requirements of a notice requiring the provision of information.

Regulation 15 provides a right of appeal for a person who is deemed by HMRC not to be “fit and proper” for the purposes of registration under the 2007 Regulations.

Regulation 18 requires the Treasury to review the operation and effect of the 2007 Regulations as amended by these Regulations and publish a report within five years after these Regulations come into force and within every five years after that. Following a review it will fall to the Treasury to consider whether the Regulations should remain as they are, or be revoked or be amended. A further instrument would be needed to revoke the Regulations or to amend them.

An Impact Assessment of the effect that these Regulations (and the Terrorism Act 2000 and Proceeds of Crime Act 2002 (Business in the Regulated Sector) (No.2) Order 2012) will have on the costs of business and the voluntary sector is available on HM Treasury's website (www.hm-treasury.gov.uk) and is published with the Explanatory Memorandum alongside these Regulations on the legislation.gov.uk website.