The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 were implemented to give effect to the updated Financial Action Task Force (FATF) global standards which promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. These Regulations replace the Money Laundering Regulations 2007 and the Transfer of Funds (Information on the Payer) Regulations 2007 with updated provisions that implement in part the Fourth Money Laundering Directive (also known as 4MLD or the Directive) 2015/849/EU and the Funds Transfer Regulation (FTR) 2015/847/EU.
The principal policy objective behind 4MLD was to update and enhance European legislation to bring it in line with the international standards on combating money laundering and terrorist financing as set out in the revision to the FATF standards in 2012. Consequently, the Regulations are underpinned by the principles of effectiveness and proportionality as well as continuing the focus on a risk-based approach. The UK government’s objective, through transposing 4MLD, is to make the financial system a hostile environment for illicit finance while minimising the burden on legitimate businesses.
These Regulations introduce a number of new requirements on relevant businesses and changes to some of the obligations found under the current regime. In addition, the new FTR accompanies the Directive and will come in to force alongside the Directive in all EU Member States. It updates the rules on information on payers and payees, accompanying transfer of funds, in any currency, for the purposes of preventing, detecting and investigating money laundering and terrorist financing, where at least one of the payment service providers involved in the transfer of funds is established in the EU.
