The year 2023 brings with it a slew of changes to the Anti-Money Laundering (AML) regulations, significantly impacting reporting obligations for trust and company service providers. The amendments aim to enhance transparency, improve due diligence, and strengthen the integrity of the register.
In her recent webinar, AML Supervisory, Regulatory and Reporting Developments in 2023, Elaine Jackson looked at AML Supervisory, Regulatory and Reporting Developments that have occurred so far in 2023 and the impact of these developments on accountants and their clients.
One of the key changes is the expansion of the definition of a trust and company service provider under Regulation 4. This amendment to regulation 12 of the money laundering regulations now includes all forms of business arrangements, not just companies and legal persons. Specifically, it encompasses limited partnerships registered in England, Wales, and Northern Ireland. Consequently, these entities are now required to conduct customer due diligence at the start of their engagement, obtaining an understanding of the beneficial owners before taking them on as clients.
Effective from April 1, 2023, Regulation 9 amends Regulation 38 of the money laundering regulations to extend the scope of the discrepancy reporting regime. This change mandates the reporting of only material discrepancies, streamlining the process by focusing on significant inconsistencies. The regulation requires relevant persons to report any discrepancies between the information they hold about the beneficial owners of companies and the information recorded by Companies House on the public companies register.
Another noteworthy development is the introduction of Regulation 90 13, which clarifies that supervisory authorities can directly require members to show them Suspicious Activity Reports (SARs). This provision aims to drive greater consistency in utilizing SARs across supervisors and reinforces the importance of maintaining records for a period of five years.
In addition, supervised firms are now required to perform a proliferation financing risk assessment. This new requirement is similar to the firm-wide business risk assessment, with further clarification on the definition of proliferation financing expected soon.
Lastly, the Russian Sanctions EU Exit Amendments introduced new prohibitions on the provision of professional services, including auditing services, to persons connected with Russia. This amendment, derived from the Sanctions and Anti-Money Laundering Act 2018, extends to a range of services such as accounting, advertising, architectural, business and management consultancy, engineering, IT consultancy, and public relations.
The AML regulatory landscape in 2023 is marked by increased scrutiny, enhanced due diligence, and stricter reporting obligations. These changes underscore the importance of staying abreast of regulatory developments and adapting compliance procedures accordingly.
To watch the full session, please click here. During this session, Elaine Jackson covers the following topics:
- The AML UK Reform Paper June 2023
- AML Monitoring / Supervision
- The Role of the MLRO
- Regulatory Updates 2023
- Reporting Obligations
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.