Money Laundering Regulations 2017—what's changed (law firms)?
Money Laundering Regulations 2017—what's changed (law firms)?

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

  • Money Laundering Regulations 2017—what's changed (law firms)?
  • Scope and application
  • Risk assessment
  • Client due diligence
  • Beneficial ownership
  • Data protection
  • Systems and controls
  • Group-level policies and procedures
  • Training

This Practice Note sets out new or amended provisions introduced by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692 as compared with the Money Laundering Regulations 2007 (the 2007 Regulations).

Headline changes for law firms to note include those in relation to:

  1. scope and application

  2. risk assessment

  3. client due diligence (CDD), specifically:

    1. reliance

    2. existing clients

    3. company formations

    4. simplified due diligence (SDD)

    5. equivalent jurisdictions

    6. politically exposed persons (PEPs)

    7. enhanced due diligence (EDD)

    8. persons acting on behalf of clients

  4. beneficial ownership

    1. definitions

    2. beneficial ownership information

  5. data protection

  6. systems and controls, eg:

    1. board level responsibility

    2. nominated officer

    3. employee screening

    4. internal audit function

    5. response systems

    6. group-level policies and procedures, and

  7. training

Scope and application

The scope and application of the MLR 2017 haven't changed significantly for law firms. They still apply where you are an independent legal professional, by way of business, participating (assisting in the planning or execution of the transaction or otherwise acting for or on behalf of a client in the transaction) in financial or real estate transactions concerning:

  1. buying and selling of real property or business entities

  2. managing client money, securities or other assets (this is narrower than handling them)

  3. opening or managing bank, savings or securities accounts (this is wider than simply opening a solicitor's client account)

  4. organising contributions