Amendments to the Money Laundering Regulations 2017 statutory instrument 2022 – Law Society response
The proposals
HM Treasury is consulting on proposed amendments to the Money Laundering Regulations 2017 (MLRs 2017).
The statutory instrument consultation is a targeted set of changes seeking views on:
- the implementation of changes to Financial Action Task Force (FATF) requirements to maintain the UK’s compliance with international AML standards on, for example:
- the regulation of virtual assets
- the requirement to carry out risk assessments on proliferation financing
- a series of small measures to address issues identified following the 2019 amendments to the MLRs
The consultation sits alongside a broader call for evidence of the UK’s anti-money laundering (AML) and counter-terrorist financing regulatory and supervisory regime.
Read our response to the call for evidence
Our view
At its centre, the UK AML regime should be effective at reducing money laundering and terrorist financing.
It must be built on an evidenced-based assessment of the risks and what works to mitigate those risks.
The MLRs 2017 must allow a more risk-based approach to tackling money laundering. This will be most effective, as it necessitates independent judgment and assessment.
The current AML regime places disproportionate compliance obligations on the legal profession (most notably on small firms).
It requires activity that does little to prevent money laundering, the cost of which is ultimately passed on to consumers.
We look forward to helping develop and apply a regime that is both proportionate and effective in tackling economic crime and is workable for our members.
Next steps
The consultation closed on 14 October.
HM Treasury is analysing the feedback and has committed to publishing a full review report by 26 June 2022.