The draft statutory instrument amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) was debated in the Commons on 3 June and passed. This means that the majority of changes are expected to come into force on or around 30 June 2026.
Key points relevant to solicitors:
- Provisions on Pooled Client Accounts (PCSs) in regulation 37 will be retained to make clear that banks may apply a simplified set of controls to a PCA provided that:
- the PCA holder is subject to the MLRs or equivalent regulations overseas
- the business relationship with the PCA-holder presents a low risk of money laundering and terrorist financing
- information on the identity of the underlying customers is available on request to the PCA-holder.
- Firms who are requested to provide such information:
- will not be required to provide information which is legally privileged
- will not in doing so breach any duty of confidentiality or restriction on the disclosure of information.
- The new requirements will only apply to PCAs created after the provisions come into force.
- High-risk third countries under regulation 33(b) and 3A will only be those subject to a Call to Action by the Financial Action Task Force – currently Iran, North Korea and Myanmar.
- Note, though, that being subject to increased monitoring by FATF will continue to be a risk factor under 33(6)(c).
- Enhanced due diligence trigger under 33(1)(f)(i) will now read ‘a transaction is unusually complex or unusually large’.
- Amendments to the Trusts Registration Service:
- Trusts exempt from registration will no longer count towards the de minimis limit.
- The start date for the de minimis trust amendments was removed, so existing trusts can now be closed on the Trusts Registration Service.
