Money laundering and pensions
Money laundering and pensions

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Money laundering and pensions
  • Anti-money laundering regime
  • How does MLR 2017 apply in respect of pension schemes?
  • Pensions impact of the Fifth Money Laundering Directive (MLD5)
  • Meaning of ‘TCSP’, ‘relevant trust’ and ‘taxable relevant trust’
  • Meaning of ‘beneficial owner’, ‘settlor’ and ‘potential beneficiary’
  • Record-keeping requirements
  • HMRC reporting requirement
  • Reporting to law enforcement authorities on request
  • Registration of TCSPs
  • more

Anti-money laundering regime

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (MLR 2017) form part of the UK's overall anti-money laundering and counter-terrorist financing regime. They came into force on 26 June 2017 to give effect to the Fourth Money Laundering Directive (4MLD), in line with Article 67 of that Directive. The MLR 2017 replace the Money Laundering Regulations 2007, SI 2007/2157 (the old Money Laundering Regulations 2007).

The MLR 2017 set administrative requirements which run parallel to the criminal element of the anti-money laundering and counter-terrorist financing regime contained in the Proceeds of Crime Act 2002 and the Terrorism Act 2000. There is some overlap with this legislation.

The MLR 2017 were adopted following two consultations by HM Treasury:

  1. a first consultation on the transposition of 4MLD launched in September 2016, and

  2. a further consultation launched in March 2017, which gives an outline of the responses submitted to the first consultation and the government’s policy decisions. This second consultation was accompanied by a draft of the MLR 2017

The finalised MLR 2017 were published on 22 June 2017.

A mere 13 months later (in July 2018), the Fifth Money Laundering Directive (EU) 2018/843 (MLD5), which amends 4MLD, came into force. From a pensions perspective, the key change made by MLD5 is to expand the transparency requirements for trusts. In the main, MLD5 was transposed