5th Money Laundering Directive (5MLD) and the Trust Registration Service (TRS)
Draft regulations have been laid, taking effect from 10 January 2020, to implement the Customer Due Diligence aspects of 5MLD. Early in 2020 HMRC will consult on the technical detail of regulations to implement the TRS aspects.
On 20 December, HMRC provided us with the following update on the impact of the 5th Money Laundering Directive (5MLD) on the Trust Register.
The update confirms that detailed technical consultation on the changes to bring existing legislation on the Trust Register in line with the provisions of 5MLD will be occurring in early 2020. The ATT and CIOT look forward to contributing to this consultation.
“As you know, the government held a consultation on 15 April 2019 entitled ‘Transposition of the Fifth Money Laundering Directive’ (the consultation), and invited views on how the government could best implement the Directive. Over 200 responses were received from a cross-section of stakeholders. The government is grateful for the views received and will publish its response in early 2020.
“The overall objective of transposition is to ensure that the UK’s anti-money laundering and counter terrorist financing regime is up-to-date, effective and proportionate. Transposition of the Directive will enable the UK to have a comprehensive regime, responsive to emerging threats, and in line with evolving international standards set by the Financial Action Task Force.
“Following agreement to extend the UK’s membership of the EU until 31 January 2020, the UK will remain a Member State on the 10 January 2020 transposition deadline. Following this, if the October 2019 Withdrawal Agreement is approved, the UK will be in an implementation period from 31 January 2020 during which EU law, including obligations under the fifth money laundering directive (5MLD), will continue to apply.
“The provisions in 5MLD will be legislated in ‘The Money Laundering and Terrorist Financing (Amendment) Regulations 2019’. These regulations will make amendments to ‘The Money Laundering, Terrorist Financing, Transfer of Funds (Information on the Payer) Regulations 2017’. The amended regulations will come into force on 10 January 2020 for all elements, but do not include the trust registration service (TRS).
“The HMT consultation confirmed that HMRC would run a more detailed technical consultation on the details of implementation. Further details on this technical consultation and how you can contribute will be shared in early 2020. TRS must contain a robust and proportionate framework, and this consultation will include additional information on the proposals for the type of express trusts that will be required to register, data collection and sharing, and penalties.
“As part of this technical consultation draft legislation for the trust registration elements of 5MLD will be shared. This will be transposed into domestic law during 2020. We will keep impacted trusts and their representatives up to date on when the requirement to provide information on TRS under 5MLD will commence and understand that sufficient notice will be required in order to ensure business readiness.”