The guidance was initially updated in September 2020 to reflect amendments made to the UK Money Laundering and Terrorist Financing Regulations 2017 (‘the 2017 Regulations’). These regulations were amended in January 2020 to reflect the Fifth Money Laundering Directive (5MLD) from the EU.
The main changes from the draft guidance are:
- Timeframe to report People of Significant Control discrepancies reduced to within 15 working days (previously 30 days).
- Strengthening from ‘should’ to ‘must’ for a short list of requirements.
- Update to the legislation referenced in the guidance following the UK leaving the EU.
- Clarified wording around enhanced due diligence for an occasional transaction where there are connections to a high-risk third country.
The approved insolvency appendix clarifies:
- how the requirement in regulation 30 works for insolvency appointments (ie, the requirement for customer due diligence (CDD) to take place before the establishment of a business relationship);
- that while reliance can be placed on a court order to evidence the identity of the insolvent, this doesn’t remove the need to consider the identity of the beneficial ownership of the entity, or remove the need to consider whether money laundering or terrorist financing activity may have taken place;
- how ongoing CDD for ongoing monitoring of business relationships is expected to apply to insolvency appointments;
- expectations for CDD on purchasers of an entity’s assets, on payer’s of other funds and on recipients of distributions and dividends; and
- that a defence against money laundering request to the National Crime Agency is required where an IP engages in any arrangement that may facilitate activity involving suspected criminal property.