Objectives of the Money Laundering Regulations

The Money Laundering Regulations are designed to protect the UK financial system and outlaw certain activities. 

The UK already had certain provisions in place (in relation to anti-terrorism measures) when the first EU Directive on Money Laundering was adopted in 1991.  This was transposed in 1993 into UK Money Laundering Regulations, which have subsequently been revised and amended – and the most recent version came into effect in 2007.

 

The Regulations require businesses including credit institutions and “high value dealers” to be registered (authorised) by the appropriate authority – in the UK, this is either HM Revenue and Customs (HMRC) or the FCA depending on the type of business.  “High value dealers” are defined as firms which accept payments of over €15,000 in cash (currently approx. £12,000) either in one instalment or through a series of linked payments: this definition may therefore apply to motor dealers who accept cash.

Firms must put in place certain controls to prevent themselves from being used for money laundering by criminals and terrorists.  These controls include appointing a designated Money Laundering Reporting Officer (MLRO), checking the identity of customers and keeping all relevant documents linked to that transaction.