Money Laundering Regulations 2007

Money Laundering Regulations 2007
Short title	Money Laundering Regulations 2007
Parliament	Parliament of the United Kingdom
Long title	The Money Laundering Regulations 2007
Introduced by	Gordon Brown, HM Treasury
Territorial extent	United Kingdom
Made	2007
Laid	2007
Coming into force	2007

Money Laundering Regulations 2007 were enacted by the Parliament of the United Kingdom to prevent and combat money laundering and terrorist financing, as recommended by the Financial Action Task Force on Money Laundering and the Basel Committee on Banking Supervision. The regulations were introduced by Gordon Brown, then Chancellor of the Exchequer, and implemented by HM Treasury in consultation with the Financial Services Authority, Serious Organised Crime Agency, and the National Crime Agency. The regulations aimed to strengthen the Anti-Money Laundering and Combating the Financing of Terrorism regime in the United Kingdom, in line with international standards set by the International Monetary Fund, World Bank, and the United Nations Office on Drugs and Crime.

Introduction

The Money Laundering Regulations 2007 were designed to regulate certain businesses and professions, including banks, building societies, credit unions, insurance companies, and solicitors, to prevent them from being used for money laundering and terrorist financing purposes. The regulations required these businesses to implement Anti-Money Laundering and Combating the Financing of Terrorism measures, such as customer due diligence, reporting suspicious transactions to the Serious Organised Crime Agency, and maintaining records of transactions, as recommended by the Wolfsberg Group and the Egmont Group of Financial Intelligence Units. The regulations also applied to casinos, bookmakers, and other gambling operators, as well as to estate agents and accountants, to prevent them from being used for money laundering and terrorist financing purposes, in line with the principles set out by the Organisation for Economic Co-operation and Development and the Council of Europe.

Background

The Money Laundering Regulations 2007 were enacted in response to the growing concern about money laundering and terrorist financing in the European Union and globally, as highlighted by the 9/11 Commission Report and the United Nations Security Council Resolution 1373. The regulations were also influenced by the Financial Action Task Force on Money Laundering's 40 Recommendations and the Basel Committee on Banking Supervision's Core Principles for Effective Banking Supervision, which provided a framework for countries to prevent and combat money laundering and terrorist financing. The regulations built on the existing Money Laundering Regulations 1993 and the Terrorism Act 2000, which had introduced Anti-Money Laundering and Combating the Financing of Terrorism measures in the United Kingdom, in line with the principles set out by the International Association of Insurance Supervisors and the Institute of International Finance.

Provisions

The Money Laundering Regulations 2007 introduced several key provisions, including the requirement for businesses to conduct customer due diligence and ongoing monitoring of transactions, as recommended by the Joint Money Laundering Steering Group and the Financial Conduct Authority. The regulations also required businesses to report suspicious transactions to the Serious Organised Crime Agency, which was responsible for investigating and prosecuting money laundering and terrorist financing offenses, in collaboration with the National Crime Agency and the Crown Prosecution Service. The regulations also introduced record-keeping requirements, which required businesses to maintain records of transactions and customer due diligence for a minimum of five years, as specified by the Data Protection Act 1998 and the Freedom of Information Act 2000.

Implementation

The Money Laundering Regulations 2007 were implemented by HM Treasury in consultation with the Financial Services Authority, Serious Organised Crime Agency, and the National Crime Agency. The regulations were also supported by the British Bankers' Association, the Building Societies Association, and the Association of British Insurers, which provided guidance and training to their members on the implementation of the regulations, in line with the principles set out by the European Banking Authority and the European Insurance and Occupational Pensions Authority. The regulations were also monitored by the Financial Ombudsman Service and the Competition and Markets Authority, which ensured that businesses were complying with the regulations and that consumers were protected from money laundering and terrorist financing risks, as recommended by the Consumer Protection and Markets Authority and the Financial Services Consumer Panel.

Enforcement

The Money Laundering Regulations 2007 were enforced by the Serious Organised Crime Agency, which was responsible for investigating and prosecuting money laundering and terrorist financing offenses, in collaboration with the National Crime Agency and the Crown Prosecution Service. The regulations were also enforced by the Financial Services Authority, which was responsible for regulating and supervising businesses subject to the regulations, as specified by the Financial Services and Markets Act 2000 and the Banking Act 2009. The regulations also introduced penalties for non-compliance, including fines and imprisonment, as specified by the Proceeds of Crime Act 2002 and the Serious Crime Act 2007.

Impact

The Money Laundering Regulations 2007 had a significant impact on the financial services industry in the United Kingdom, as they introduced new requirements and obligations for businesses to prevent and combat money laundering and terrorist financing. The regulations also had an impact on the economy of the United Kingdom, as they helped to prevent and detect money laundering and terrorist financing activities, which can have a negative impact on the economy and financial stability, as highlighted by the International Monetary Fund and the World Bank. The regulations also contributed to the development of a more robust Anti-Money Laundering and Combating the Financing of Terrorism regime in the European Union, as recommended by the European Commission and the Council of the European Union, in line with the principles set out by the Organisation for Economic Co-operation and Development and the Financial Action Task Force on Money Laundering.

Category:United Kingdom law