UK Government responds to Money Laundering Regulations consultation

The UK Government has set out its intentions on making the the current Money Laundering Regulations (MLRs) more effective and proportionate in its response to an HM Treasury consultation. 

The consultation invited views from a broad range of stakeholders, including those within the legal sector, to assess how the current MLRs are working in practice and to identify opportunities for improvement. 

The response, published on Wednesday, 17 July, summarises feedback received from the consultation and outlines the government’s intentions for making the MLRs more effective and proportionate for all regulated sectors, including the legal profession. 

It should be noted that this is a consultation response and does not constitute an official notification of regulatory change at this stage. Any amendment to the regulations will be communicated separately. 

The consultation response is particularly relevant to those in legal practice who fall within the scope of the MLRs. At a high level, the most pertinent areas discussed include: 

• Proposals to make customer due diligence (CDD) requirements more targeted and proportionate, with the potential for more streamlined processes - such as the need to apply enhanced due diligence (EDD) to all complex transactions being amended to the effect that it is only mandatory when the transaction is deemed to be unusually complex. 

• A reaffirmed focus on ensuring that anti-money laundering obligations are proportionate to the risks faced by different types and sizes of legal businesses 

• There is an ongoing commitment to clarify the regulations’ scope and ensure that guidance is coherent and tailored to the unique circumstances of the legal profession. 

Gemma Turnbull, Head of AML at the Law Society of Scotland, said: “The UK Government’s response to the HM Treasury consultation sets out how it plans to amend the MLRs and we would advise our members to familiarise themselves with the response, while continuing to follow current regulations and guidance until any formal changes are confirmed and communicated. 

“We will ensure that we keep our members updated on any proposed changes and it remains important to continue to monitor official notifications.”