On 15 July, the UK Government published regulations to transpose the EU 5th Money Laundering Directive into the UK Money Laundering Regulations. This should have been done by 10 March 2020, but the UK missed that deadline.
The Regulations mainly apply to the UK’s register of express trusts and in particular, expand the scope of the register and require that information on the register is made available in certain circumstances to those with a legitimate interest.
Of particular note:
• Whilst UK express trusts with taxable consequences are already required to collect information on beneficial ownership, the scope is now widened to include those with no tax consequences. Trustees of UK non-exempt trusts (see below) must now collect beneficial ownership information and register before 10 March 2022;
• As well as UK express trusts, non-UK trusts which acquire UK land or which have at least one UK trustee and enter into a business relationship with a UK AML regulated entity (“obliged entity”), must register by 10 March 2022 or 30 days from the date the relationship commences or the acquisition is recorded in the Land Registry. These non-UK trusts will include vehicles such as Jersey Property Unit Trusts;
• Certain exempt trusts, defined as “Excluded Trusts” are not required to register and importantly include UK Charitable Trusts, certain trusts effected by Will, co-ownership property trusts where the trustees and beneficiaries are the same persons, trusts created for professional services such as an Authorised Unit Trust Scheme and trusts created solely for a commercial transaction;
• From 10 March 2022, when entering into a new business relationship with a trust that is required to register under the above requirements, an obliged entity dealing with such trusts must collect proof of registration. To facilitate this, trustees will be able to download a digital proof of registration from the register which they can then provide to the obliged entity.
The other changes introduced by the Regulations concern correspondent banking, reporting of discrepancies in beneficial ownership information to Companies House, customer due diligence on publicly listed companies, the use of confidential information, registration deadlines for some firms and directions to cryptoasset businesses.