07.06.11 HM Treasury Publish MLR Review

07.06.11 HM Treasury Publish MLR Review

HM Treasury published its response to the review of the Money Laundering Regulations 2007. It is a consultation document requiring responses to be submitted by 30August 2011.

It separates itself from the obvious areas from which FATF will review their 40 recommendations such as PEP’s and expansion of the regime. These changes will result in the 4th Directive; however with a proposed implementation date of 1 April 2012 we could be in for two sets of new regulations in a short space of time.

After going through the document there is lots of discussions. However the main ones are

  • Removal of criminal sanctions
  • Increase supervisor powers to mitigate the risk of the removal of the above
  • Reliance to be extended to all professional bodies in Schedule 3
  • De-minimus exclusion to small businesses of euro 15,000 or below annual turnover
  • UK estate agents selling offshore property to be bought into the Regulations, though not letting agents
  • Powers for all supervisors to impose penalties when not allowed to enter business premises
  • Powers to impose penalties for unreasonable behaviour to provide information
  • Supervisor powers to enforce payment of fees and powers of de-registration
  • More freedom for the exchange of information for supervisors.

There are a lot of general discussions surrounding policies and procedures and general guidance coupled with the risk based approach and the various sectors. Generally it is perceived that it is not so much as “on the shelf” guidance that does any good but those that promote active participation, the ‘toolkits’, that works. In 7.11 on this subject, I think I can take some pride here, since I believe they may be talking about the one I wrote for one of the supervisors and which is possibly going to adopted by two more.

In reality the document is a reinforcement of the risk based approach, almost a plea to work in that less rigid way, the end of the tick box approach whilst working without fear of prosecution if we should not always get it right. An approach that can only be undertaken if law enforcement, our supervisors and the regulated businesses themselves work towards the same outcome together. If achieved, it should increase compliance at a reduced cost.