Money Laundering Regulations (MLR) 2007

Money Laundering Regulations (MLR) 2007 and (MLR) 2017

The Money Laundering Regulations 2007 implement the EU Third Money Laundering Directive in the UK. Both of these pieces of legislation reflect the recommendations of the International Financial Action Task Force which was set up to tackle money laundering on a worldwide basis. The Money Laundering Regulations play a crucial role in safeguarding the UK financial system from organised criminals and terrorists.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) came into force on the 26 June 2017. They implement the EU’s 4th Directive on Money Laundering. In doing so, they replace the Money Laundering Regulations 2007 (MLR 2007) and the Transfer of Funds (Information on the Payer) Regulations 2007 which were previously in force.

The MLR 2017 was subject to two rounds of consultation, the first between September and November 2016 and the second between March and April 2017. The final instrument has not changed substantially from the most recent consultation draft.

It should be noted that this is not a root and branch change. MLR 2017 constitutes an evolution of content and a reorganisation of structure. The intention is for MLR 2017 is to improve upon and plug certain gaps in the MLR 2007, these including:

  • Changing the approach to Customer Due Diligence.
  • Seeking to prevent new means of terrorist financing, including through e-money and prepaid cards.
  • Improving transparency of beneficial ownership of companies and trusts
  • Effectively enforcing sanctions.

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