The Money Laundering, Terrorist ... - Legislation.gov.uk

1 S T A T U T O R Y I N S T R U M E N T S 2017 No. 692 FINANCIAL SERVICES The Money laundering , Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Made - - - - at on 22nd June 2017 Laid before Parliament at on 22nd June 2017 Coming into force - - 26th June 2017 CONTENTS PART 1 Introduction 1. Citation and commencement 5 2. Prescribed regulations 6 3. General interpretation 6 4. Meaning of business relationship 10 5. Meaning of beneficial owner: bodies corporate or partnership 11 6. Meaning of beneficial owner: trusts, similar arrangements and others 11 7. Supervisory authorities 13 PART 2 Money laundering and Terrorist Financing CHAPTER 1 Application 8. Application 14 9. Carrying on business in the United Kingdom 15 10. Credit institutions and financial institutions 15 11. Auditors and others 17 12.

2 Independent legal professionals and trust or company service providers 17 13. Estate agents 18 14. High value dealers, casinos and auction platforms 18 15. Exclusions 18 CHAPTER 2 Risk assessment and controls 16. Risk assessment by the Treasury and Home Office 20 17. Risk assessment by supervisory authorities 21 18. Risk assessment by relevant persons 22 219. Policies, controls and procedures 22 20. Policies, controls and procedures: group level 24 21. Internal controls 25 22. Central contact points: electronic Money issuers and payment service providers 26 23. Requirement on authorised person to inform the FCA 26 24. Training 27 25. Supervisory action 27 CHAPTER 3 Ownership and Management Restrictions 26. Prohibitions and approvals 29 PART 3 Customer Due Diligence CHAPTER 1 Customer due diligence: general 27. Customer due diligence 30 28.

3 Customer due diligence measures 31 29. Additional customer due diligence measures: credit institutions and financial institutions 34 30. Timing of verification 35 31. Requirement to cease transactions etc 35 32. Exception for trustees of debt issues 36 CHAPTER 2 Enhanced customer due diligence 33. Obligation to apply enhanced customer due diligence 37 34. Enhanced customer due diligence: credit institutions, financial institutions and correspondent relationships 39 35. Enhanced customer due diligence: politically exposed persons 40 36. Politically exposed persons: other duties 42 CHAPTER 3 Simplified customer due diligence 37. Application of simplified customer due diligence 43 38. Electronic Money 45 PART 4 Reliance and Record-keeping 39. Reliance 45 40. Record-keeping 47 41. Data Protection 48 PART 5 Beneficial Ownership Information 42.

4 Application of this Part 48 43. Corporate bodies: obligations 49 44. Trustee obligations 50 45. Register of beneficial ownership 51 3 PART 6 Money laundering and Terrorist Financing: Supervision and Registration CHAPTER 1 Duties of supervisory authorities 46. Duties of supervisory authorities 53 47. Duties of supervisory authorities: information 54 48. Duties of the FCA: guidance on politically exposed persons 55 49. Duties of self-regulatory organisations 56 50. Duty to co-operate 56 51. Regulatory information 57 52. Disclosure by supervisory authorities 57 CHAPTER 2 Registration 53. Interpretation 58 54. Duty to maintain registers of certain relevant persons 58 55. Power to maintain registers 59 56. Requirement to be registered 59 57. Applications for registration in a register maintained under regulation 54 or 55 60 58.

5 Fit and proper test 61 59. Determination of applications for registration under regulations 54 and 55 62 60. Cancellation and suspension of registration in a register under regulation 54 or 55 63 PART 7 Transfer of Funds (Information on the Payer) Regulations 61. Interpretation 65 62. Transfer of funds supervisory authorities 65 63. Duties of transfer of funds supervisory authorities 65 64. Obligations of payment service providers 66 PART 8 Information and Investigation 65. Interpretation 67 66. Power to require information 67 67. Requests in support of other authorities 68 68. Requests to other authorities 69 69. Entry, inspection of premises without a warrant etc 69 70. Entry of premises under warrant 70 71. Retention of documents taken under regulation 66 or 70 72 72. Provision of information and warrants: safeguards 72 73.

6 Admissibility of statements 73 74. Powers of relevant officers 74 4 PART 9 Enforcement CHAPTER 1 General 75. Meaning of relevant requirement 74 CHAPTER 2 Civil penalties and notices 76. Power to impose civil penalties: fines and statements 75 77. Power to impose civil penalties: suspension and removal of authorisation 75 78. Power to impose civil penalties: prohibitions on management 76 79. Imposition of civil penalties 77 80. Injunctions 77 81. The FCA: disciplinary measures (procedure) 78 82. The FCA: procedure (general) 79 83. The Commissioners: disciplinary measures (procedure) 80 84. Publication: the FCA 80 85. Publication: the Commissioners 81 CHAPTER 3 Criminal offences, penalties and proceedings etc. 86. Criminal offence 82 87. Offences of prejudicing investigations 83 88. Information offences 84 89. Proceedings: general 85 90.

7 Proceedings: jurisdiction 85 91. Proceedings: partnership or unincorporated association 86 92. Offence by bodies corporate, partnership or unincorporated association 86 PART 10 Appeals CHAPTER 1 Decisions of the FCA 93. Appeals against decisions of the FCA 87 CHAPTER 2 Decisions of the Commissioners 94. Offer of review 87 95. Review by the Commissioners 88 96. Extensions of time 88 97. Review out of time 88 98. Nature of review etc 88 99. Appeals against decisions of the Commissioners 89 100. Appeals against decisions of the Commissioners: procedure 90 PART 11 Miscellaneous Provisions 101. Recovery of charges and penalties through the court 90 102. Costs of supervision 90 5103. Obligations on public authorities 91 104. Suspicious activity disclosures 92 105. Disclosure by the Commissioners 93 106. General restrictions 93 107.

8 Transfers between the United Kingdom and the Channel Islands and the Isle of Man 93 108. Review 93 109. Consequential amendments 94 110. Revocation and saving provisions 94 SCHEDULES SCHEDULE 1 Professional Bodies 96 SCHEDULE 2 Activities listed in points 2 to 12, 14 and 15 of Annex I to the Capital Requirements Directive 96 SCHEDULE 3 Relevant Offences 97 SCHEDULE 4 Supervisory Information 100 SCHEDULE 5 Connected Persons 101 SCHEDULE 6 Meaning of relevant requirement 101 SCHEDULE 7 Consequential Amendments 104 PART 1 Consequential Amendments to Primary legislation 104 PART 2 Consequential Amendments to Secondary legislation 110 The Treasury are designated(a) for the purposes of section 2(2) of the European Communities Act 1972(b) in relation to the prevention of Money laundering and Terrorist financing.

9 The Treasury in exercise of the powers conferred by section 2(2) of that Act and by sections 168(4)(b), 402(1)(b), 417(1) and 428(3) of the Financial Services and Markets Act 2000(c), make the following Regulations. PART 1 Introduction Citation and commencement 1. (1) These Regulations may be cited as the Money laundering , Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. (2) These Regulations come into force on 26th June 2017. (a) 2007/2133. (b) 1972 c. 68. Section 2(2) was amended by section 27 of the Legislative and Regulatory Reform Act 2006 (c. 51) and by section 3 of, and the Schedule to, the European Union (Amendment) Act 2008 (c.)

10 7). By virtue of the amendment of section 1(2) by section 1 of the European Economic Area Act 1993 (c. 51), an order may be made under section 2(2) of the European Communities Act 1972 to implement obligations of the United Kingdom created or arising by or under the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 (Cm 2073) and the Protocol adjusting the Agreement signed in Brussels on 17th March 1993 (Cm 2183). (c) 2000 ; section 168(4)(b) was amended by the Financial Services Act 2012 ( ), Schedule 12, Part 1; section 402(1) was amended by the Financial Services Act 2012 ( ), Schedule 9, Parts 1 and 7; and section 417(1) was amended by section 48(1)(d) of the Financial Services Act 2012 ( ). There are other amendments to section 417(1) which are not relevant to these Regulations.