Money Laundering Regulations 2017—reliance
Money Laundering Regulations 2017—reliance

The following Risk & Compliance guidance note provides comprehensive and up to date legal information covering:

  • Money Laundering Regulations 2017—reliance
  • What is (and isn't) reliance?
  • What can you rely on another person for?
  • Who can you rely on?
  • What do you need from the third party?
  • Where you are relied on by a third party (granting reliance)
  • Reliance in practice

This Practice Note reflects the requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692 which came into force on 26 June 2017. It also reflects guidance published by the Joint Money Laundering Steering Group (JMLSG).

Often a customer may instruct other advisors or be in professional contact with other relevant persons in the same matter, eg in the context of a large transaction, the customer may also instruct accountants or tax professionals. Equally, the customer may already be instructing a separate part of your business group.

Since having several requests for the same information from these various advisors and business partners can be somewhat frustrating for the customer, and totally unnecessary, the MLR 2017 permit you to rely on others to conduct the customer due diligence (CDD) process, subject to limitations.

It's extremely important to note that:

  1. you will remain liable for any failure of the third party in applying CDD measures, and

  2. failure to comply with the CDD requirements in the MLR 2017 carries criminal penalties

This Practice Note discusses reliance on third parties to conduct the CDD process on your behalf and what you need to consider when you permit others to rely on you. It provides guidance which is of general application. You should check whether the MLR 2017