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The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

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CHAPTER 1U.K.Application

ApplicationU.K.

8.—(1) Parts 1 to 6 and 8 to 11 apply to the persons (“relevant persons”) acting in the course of business carried on by them in the United Kingdom, who—

(a)are listed in paragraph (2); and

(b)do not come within the exclusions set out in regulation 15.

(2) The persons listed in this paragraph are—

(a)credit institutions;

(b)financial institutions;

(c)auditors, insolvency practitioners, external accountants and tax advisers;

(d)independent legal professionals;

(e)trust or company service providers;

(f)estate agents [F1and letting agents];

(g)high value dealers;

(h)casinos;

[F2(i)art market participants;

(j)cryptoasset exchange providers;

(k)custodian wallet providers.]

(3) Regulations 3, 7, 9, 15, 17 to 21, 24, 25, 46, 47, 50 to 52, 65 to 82, 84, 86 to 93, 101, 102 and 106 apply to an auction platform acting in the course of business carried on by it in the United Kingdom, and such an auction platform is a relevant person for the purposes of those provisions.

(4) The definitions in regulations 10 to 14 apply for the purposes of this regulation.

Textual Amendments

Carrying on business in the United KingdomU.K.

9.—(1) For the purposes of these Regulations, a relevant person (“A”) is to be regarded as carrying on business in the United Kingdom in the cases described in this regulation even if A would not otherwise be regarded as doing so.

F3(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The second case is where—

(a)A's registered office (or if A does not have a registered office, A's head office) is in the United Kingdom; and

(b)the day-to-day management of the carrying on of A's business is the responsibility of—

(i)that office, or

(ii)another establishment maintained by A in the United Kingdom.

(4) The third case is where—

(a)A is a casino which provides facilities for remote gambling (within the meaning of section 4 of the Gambling Act 2005 (remote gambling) M1) and—

(b)either—

(i)at least one piece of remote gambling equipment (within the meaning of section 36(4) of the Gambling Act 2005 (territorial application)) is situated in Great Britain, or

(ii)no such equipment is situated in Great Britain but the facilities provided by A are used there.

(5) For the purposes of [F4paragraph (3)]—

F5(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)it is irrelevant where the person with whom the business is carried on is situated.

Textual Amendments

Marginal Citations

Credit institutions and financial institutionsU.K.

10.—(1) In these Regulations, “credit institution” means—

(a)a credit institution as defined in Article 4.1(1) of the capital requirements regulation; or

(b)a branch (as defined by Article 4.1(17) of that regulation) located in [F6the United Kingdom] of an institution falling within sub-paragraph (a) (or an equivalent institution whose head office is located in a third country) wherever the institution's head office is located,

when it accepts deposits or other repayable funds from the public or grants credits for its own account (within the meaning of the capital requirements regulation), or when it bids directly in auctions in accordance with the emission allowance auctioning regulation [F7or the UK auctioning regulations] on behalf of its clients.

(2) In these Regulations, “financial institution” means—

(a)an undertaking, including a money service business, other than an institution referred to in paragraph (3), when the undertaking carries out one or more listed activity;

[F8(b)an authorised person (within the meaning of section 31 of FSMA), who has permission under Part 4A of FSMA to carry out or effect contracts of insurance, when carrying out or effecting any contract of long-term insurance (an “insurance undertaking”);]

(c)a person (other than [F9a person falling within one of the exclusions to the definition of “investment firm” in article 3(1) of the Regulated Activities Order]), whose regular occupation or business is the provision to other persons of an investment service or the performance of an investment activity on a professional basis, when—

(i)providing investment services or performing investment activities ([F10within the meaning of that article]); or

(ii)bidding directly in auctions in accordance with the emission allowance auctioning regulation [F11or the UK auctioning regulations] on behalf of its clients;

(d)a person falling within [F12paragraph 1(k) of Part 1 of Schedule 3 to the Regulated Activities Order], when bidding directly in auctions in accordance with the emission allowance auctioning regulation [F13or the UK auctioning regulations] on behalf of clients of the person's main business;

(e)a collective investment undertaking, when marketing or otherwise offering its units or shares;

(f)an insurance intermediary as defined in Article 2.5 of Directive 2002/92/EC of the European Parliament and of the Council of 9th December 2002 on insurance mediation M2, with the exception of a tied insurance intermediary as mentioned in Article 2.7 of that Directive [F14(and for this purpose, Article 2.7 is to be read as if “insurance undertaking” has the meaning given in sub-paragraph (b))], when it acts in respect of contracts of long-term insurance;

(g)a branch located in [F15the United Kingdom] of a person referred to in sub-paragraphs (a) to (f) (or an equivalent person whose head office is located in a third country), wherever the person's head office is located, when carrying out any activity mentioned in sub-paragraphs (a) to (f);

(h)the National Savings Bank;

(i)the Director of Savings, when money is raised under the auspices of the Director under the National Loans Act 1968 M3.

(3) For the purposes of paragraph (2)(a), the institutions referred to are—

(a)a credit institution;

(b)an undertaking whose only listed activity is as a creditor under an agreement which—

(i)falls within section 12(a) of the Consumer Credit Act 1974 M4 (debtor-creditor-supplier agreements);

(ii)provides fixed sum credit (within the meaning given in section 10(1)(b) of the Consumer Credit Act 1974 (running-account credit and fixed-sum credit)) in relation to the provision of services; and

(iii)provides financial accommodation by way of deferred payment or payment by instalments over a period not exceeding 12 months;

(c)an undertaking whose only listed activity is trading for its own account in one or more of the products listed in point 7 of F16...[F17 Schedule 2] where the undertaking does not have a customer (and, for this purpose, “customer” means a person other than the undertaking which is not a member of the same group as the undertaking).

[F18(4) For the purposes of this regulation—

(a)a “listed activity” means an activity listed in points 2 to 12, 14 and 15 of F19... Schedule 2;

(b)“Regulated Activities Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.]

Textual Amendments

Marginal Citations

M2OJ L 9, 15.01.2003, p.3.

Auditors and othersU.K.

11.  In these Regulations—

(a)“auditor” means any firm or individual who is—

(i)a statutory auditor within the meaning of Part 42 of the Companies Act 2006 M5 (statutory auditors), when carrying out statutory audit work within the meaning of section 1210 of that Act (meaning of statutory auditor), or

(ii)a local auditor within the meaning of section 4(1) of the Local Audit and Accountability Act 2014 (general requirements for audit) M6, when carrying out an audit required by that Act.

(b)“insolvency practitioner” means any firm or individual who acts as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986 M7 or article 3 of the Insolvency (Northern Ireland) Order 1989 M8 (meaning of “act as insolvency practitioner”).

(c)“external accountant” means a firm or sole practitioner who by way of business provides accountancy services to other persons, when providing such services.

(d)“tax adviser” means a firm or sole practitioner who by way of business provides [F20material aid, or assistance or advice, in connection with the tax affairs of other persons, whether provided directly or through a third party], when providing such services.

Textual Amendments

Marginal Citations

M52006 c.46. Section 1210 was amended by S.I. 2008/565; 2008/567; 2008/1950; 2012/1809 and 2013/3115.

M71986 c.45. Section 388 was amended by section 11(1) of the Bankruptcy (Scotland) Act 1993 (c.6); section 4(2) of the Insolvency Act 2000 (c.39); paragraph 2(11) of Schedule 6 to the Deregulation Act 2015 (c.20) and by S.I 1994/2421; 2002/1240; 2002/2708; 2009/1941 and 2016/1034.

Independent legal professionals and trust or company service providersU.K.

12.—(1) In these Regulations, “independent legal professional” means a firm or sole practitioner who by way of business provides legal or notarial services to other persons, when participating in financial or real property transactions concerning—

(a)the buying and selling of real property or business entities;

(b)the managing of client money, securities or other assets;

(c)the opening or management of bank, savings or securities accounts;

(d)the organisation of contributions necessary for the creation, operation or management of companies; or

(e)the creation, operation or management of trusts, companies, foundations or similar structures,

and, for this purpose, a person participates in a transaction by assisting in the planning or execution of the transaction or otherwise acting for or on behalf of a client in the transaction.

(2) In these Regulations, “trust or company service provider” means a firm or sole practitioner who by way of business provides any of the following services to other persons, when that firm or practitioner is providing such services—

[F21(a)forming a firm;]

(b)acting, or arranging for another person to act—

(i)as a director or secretary of a company;

(ii)as a partner of a partnership; or

(iii)in a similar capacity in relation to other legal persons;

(c)providing a registered office, business address, correspondence or administrative address or other related services for a company, partnership or any other legal person or legal arrangement;

(d)acting, or arranging for another person to act, as—

(i)a trustee of an express trust or similar legal arrangement; or

(ii)a nominee shareholder for a person other than a company whose securities are listed on a regulated market.

Textual Amendments

Estate agents [F22and letting agents]U.K.

13.—(1) In these Regulations, “estate agent” means a firm or a sole practitioner, who, or whose employees, carry out estate agency work, when the work is being carried out.

(2) For the purposes of paragraph (1) “estate agency work” is to be read in accordance with section 1 of the Estate Agents Act 1979 M9 (estate agency work), but for those purposes references in that section to disposing of or acquiring an interest in land are (despite anything in section 2 of that Act) to be taken to include references to disposing of or acquiring an estate or interest in land outside the United Kingdom where that estate or interest is capable of being owned or held as a separate interest.

[F23(3) In these Regulations, “letting agent” means a firm or sole practitioner who, or whose employees, carry out letting agency work, when carrying out such work.

(4) For the purposes of paragraph (3), “letting agency work” means work—

(a)consisting of things done in response to instructions received from—

(i)a person (a “prospective landlord”) seeking to find another person to whom to let land, or

(ii)a person (a “prospective tenant”) seeking to find land to rent, and

(b)done in a case where an agreement is concluded for the letting of land—

(i)for a term of a month or more, and

(ii)at a rent which during at least part of the term is, or is equivalent to, a monthly rent of 10,000 euros or more.

(5) For the purposes of paragraph (3) “letting agency work” does not include the things listed in paragraph (6) when done by, or by employees of, a firm or sole practitioner if neither the firm or sole practitioner, nor any of their employees, does anything else within paragraph (4).

(6) Those things are—

(a)publishing advertisements or disseminating information;

(b)providing a means by which a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or a prospective landlord;

(c)providing a means by which a prospective landlord and a prospective tenant can communicate directly with each other;

(d)the provision of legal or notarial services by a barrister, advocate, solicitor or other legal representative communications with whom may be the subject of a claim to professional privilege or, in Scotland, protected from disclosure in legal proceedings on grounds of confidentiality of communication.

(7) In paragraph (4) “land” includes part of a building and part of any other structure.]

Textual Amendments

Marginal Citations

High value dealers, [F24casinos, auction platforms and art market participants]U.K.

14.—(1) In these Regulations—

(a)“high value dealer” means a firm or sole trader who by way of business trades in goods (including an auctioneer dealing in goods), when the trader makes or receives, in respect of any transaction, a payment or payments in cash of at least 10,000 euros in total, whether the transaction is executed in a single operation or in several operations which appear to be linked;

(b)“casino” means the holder of a casino operating licence and, for this purpose, a “casino operating licence” has the meaning given by section 65(2)(a) of the Gambling Act 2005 M10 (nature of licence);

(c)“auction platform” means a platform which auctions two-day spot or five-day futures, within the meanings given by [F25regulation 2(1) of the UK auctioning regulations], when it carries out activities covered by that regulation.

[F26(d)“art market participant” means [F27, subject to paragraph (3),] a firm or sole practitioner who—

(i)by way of business trades in, or acts as an intermediary in the sale or purchase of, works of art and the value of the transaction, or a series of linked transactions, amounts to 10,000 euros or more; or

(ii)is the operator of a freeport when it, or any other firm or sole practitioner, by way of business stores works of art in the freeport and the value of the works of art so stored for a person, or a series of linked persons, amounts to 10,000 euros or more;

(e)“freeport” means a warehouse or storage facility within an area designated by the Treasury as a special area for customs purposes pursuant to section 100A(1) of the Customs and Excise Management Act 1979 (designation of free zones) M11;

(f)“work of art” means anything which, in accordance with section 21(6) to (6B) of the Value Added Tax Act 1994 (value of imported goods) M12, is a work of art for the purposes of section 21(5)(a) of that Act.]

(2) A payment does not cease to be a “payment in cash” for the purposes of paragraph (1)(a) if cash is paid by or on behalf of the person making the payment—

(a)to a person other than the other party to the transaction for the benefit of the other party, or

(b)into a bank account for the benefit of the other party to the transaction.

[F28(3) A firm or sole practitioner is not an art market participant for the purposes of paragraph (1)(d)(i) in relation to the sale of a work of art which is created by, or is attributable to, a member of the firm or the sole practitioner.]

Textual Amendments

Marginal Citations

M11 1979 c. 2. Section 100A was inserted by the Finance Act 1984 (c.2), section 8 and (c.43), Schedule 4.

M12 1994 c. 23. Sections 21(6) to (6B) were inserted by section 12(2) of the Finance Act 1999 (c.16).

[F29Cryptoasset exchange providers and custodian wallet providersU.K.

14A.—(1) In these Regulations, “cryptoasset exchange provider” means a firm or sole practitioner who by way of business provides one or more of the following services, including where the firm or sole practitioner does so as creator or issuer of any of the cryptoassets involved, when providing such services—

(a)exchanging, or arranging or making arrangements with a view to the exchange of, cryptoassets for money or money for cryptoassets,

(b)exchanging, or arranging or making arrangements with a view to the exchange of, one cryptoasset for another, or

(c)operating a machine which utilises automated processes to exchange cryptoassets for money or money for cryptoassets.

(2) In these Regulations, “custodian wallet provider” means a firm or sole practitioner who by way of business provides services to safeguard, or to safeguard and administer—

(a)cryptoassets on behalf of its customers, or

(b)private cryptographic keys on behalf of its customers in order to hold, store and transfer cryptoassets,

when providing such services.

(3) For the purposes of this regulation—

(a)“cryptoasset” means a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored or traded electronically;

(b)“money” means—

(i)money in sterling,

(ii)money in any other currency, or

(iii)money in any other medium of exchange,

but does not include a cryptoasset; and

(c)in sub-paragraphs (a), (b) and (c) of paragraph (1), “cryptoasset” includes a right to, or interest in, the cryptoasset.]

Textual Amendments

ExclusionsU.K.

15.—(1) Parts 1 to 4, 6 and 8 to 11 do not apply to the following persons when carrying on any of the following activities—

(a)a registered society within the meaning of section 1 of the Co-operative and Community Benefit Societies Act 2014 (meaning of “registered society”) M11, when it—

(i)issues withdrawable share capital within the limit set by section 24 of that Act (maximum shareholding in society); or

(ii)accepts deposits from the public within the limit set by section 67(2) of that Act (carrying on of banking by societies);

(b)a society registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 M12, when it—

(i)issues withdrawable share capital within the limit set by section 6 M13 of that Act (maximum shareholding in society); or

(ii)accepts deposits from the public within the limit set by section 7(3) of that Act (carrying on of banking by societies);

(c)a person who is (or falls within a class of persons) specified in any of paragraphs 2 to 23, 26 to 38 or 40 to 49 of the Schedule to the Financial Services and Markets Act 2000 (Exemption) Order 2001 M14, when carrying out any activity in respect of which that person is exempt;

(d)a local authority within the meaning given in article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 M15, when carrying on an activity which would be a regulated activity for the purposes of FSMA but for article 72G of that Order M16;

(e)a person who was an exempted person for the purposes of section 45 of the Financial Services Act 1986 M17 (miscellaneous exemptions) immediately before its repeal, when exercising the functions specified in that section;

(f)a person whose main activity is that of a high value dealer, when engaging in financial activity on an occasional or very limited basis as set out in paragraph (3); or

(g)a person preparing a home report, which for these purposes means the documents prescribed for the purposes of section 98, 99(1) or 101(2) of the Housing (Scotland) Act 2006 (duties: information and others) M18.

(2) These Regulations do not apply to a person who falls within regulation 8 solely as a result of that person engaging in financial activity on an occasional or very limited basis as set out in paragraph (3).

(3) For the purposes of paragraphs (1)(f) and (2), a person is to be considered as engaging in financial activity on an occasional or very limited basis if all the following conditions are met—

(a)the person's total annual turnover in respect of the financial activity does not exceed £100,000;

(b)the financial activity is limited in relation to any customer to no more than one transaction exceeding 1,000 euros, whether the transaction is carried out in a single operation, or a series of operations which appear to be linked;

(c)the financial activity does not exceed 5% of the person's total annual turnover;

(d)the financial activity is ancillary and directly related to the person's main activity;

(e)the financial activity is not the transmission or remittance of money (or any representation of monetary value) by any means;

(f)the person's main activity is not that of a person falling within regulation 8(2)(a) to (f) or (h) [F30to (k)];

(g)the financial activity is provided only to customers of the main activity of the person and is not offered to the public.

(4) Chapters 2 and 3 of Part 2, and Parts 3 to 9, do not apply to—

(a)the Auditor General for Scotland;

(b)the Auditor General for Wales;

(c)the Bank of England;

(d)the Comptroller and Auditor General;

(e)the Comptroller and Auditor General for Northern Ireland;

(f)the Official Solicitor to the Supreme Court, when acting as trustee in his or her official capacity;

(g)the Treasury Solicitor.

Textual Amendments

Marginal Citations

M11 1979 c. 2. Section 100A was inserted by the Finance Act 1984 (c.2), section 8 and (c.43), Schedule 4.

M12 1994 c. 23. Sections 21(6) to (6B) were inserted by section 12(2) of the Finance Act 1999 (c.16).

M14S.I. 2001/1201. Paragraph 15A was inserted by S.I. 2003/47; paragraph 15B was inserted by S.I. 2009/118; paragraph 19 was revoked by S.I. 2014/366; paragraphs 21 and 27 were substituted by S.I. 2002/1310 and 2003/1675 respectively; paragraph 30 was revoked by S.I. 2003/3225; paragraph 31 was substituted by paragraph 10 of Schedule 2 to the Tourist Boards (Scotland) Act 2006 (asp 15) and amended by S.I. 2007/1103; paragraph 33A was inserted by S.I. 2007/1821; paragraphs 34A, 34B and 34C were inserted by SI. 2005/592, 2008/682 and 2012/763 respectively; paragraph 36 was revoked by S.I. 2007/125; paragraph 40 was amended by S.I. 2013/1881; paragraph 41 was amended by S.I. 2010/86; paragraph 42 was amended by S.I. 2007/125; paragraph 44 was amended by S.I. 2014/506; paragraph 45 was amended by S.I. 2013/1773; paragraph 47 was revoked by S.I. 2014/366; paragraph 48 was substituted by S.I. 2003/1673 and paragraph 49 was inserted by S.I. 2001/3623

M15S.I. 2001/544. Article 3(1) was amended, but the amendments are not relevant to these Regulations.

M16Article 72G was inserted by S.I. 2014/366, and amended by S.I. 2015/910 and 2016/392.

M171986 c.60. Section 45 was repealed by S.I. 2001/3649.

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