It’s been a very busy year for compliance and regulatory updates in the UK so we’re going to be covering the key changes here in one place.
1 – New Russian Sanctions
At the start of the year, Russia illegally invaded Ukraine. In response, the UK increased sanctions against key individuals and businesses associated with the current Russian regime.
To this point, 1,200 people and over 120 businesses have been added to the UK sanctions lists as a result. Make sure screening your clients against the latest sanctions list to ensure you’re not working with and supporting the illegal war in Ukraine.
2 – The Economics Crime Act
In March, the Economic Crime Act received royal assent that brought in new powers to tackle fraud, money laundering, and the creation of a new register of overseas entities which was first tabled in 2017.
It also gave the government greater power to impose sanctions not just on individuals but by specifying certain groups.
The second Economics Crime act is currently passing through parliament which adds additional powers to reform Companies House.
3- Amendments to Money Laundering Regulations (MLR 2022)
MLR 2022 which is an amendment to the 2017 regs came into force in March this year. The legislation adds clarification to a number of areas such as art market participation being descoped if they sell only their own works whether as an individual or through a company but also introduced new powers.
AML supervisors such as the FCA, SRA and HMRC now have the right to access suspicious activity reports submitted to the NCA via a new dedicated ‘gateway.’
It also brought in the requirement for entities to identify, assess and take effective action to mitigate proliferation financing risks, which is financing/fund related to WMDs.
4 – Material information requirements for Estate Agents
As of May, when listing a property for sale or rent, Estate Agent must ensure its council tax band/ rate, price or rent, and tenure information (for sales) is included. The top property portals have all adopted these changes and made it a requirement for listing.
Parts B and C are being developed in conjunction with key partners within the property industry with no dates when they will land yet published.
5 – The Data Reform Bill
Announced in May, the data reform bill was the UK Government’s first major shakeup of data protection laws since leaving the EU.
Proposed amendments to the UK’s current data protection regime included plans to:
- removing “vexatious or excessive” DSAR requests
- reforming cookie requirements
- replacing DPOs with new Senior Responsible Individuals (SRIs)
The bill was being fast-tracked through parliament as it was projected to save businesses £1BN over ten years. Subsequent changes in governmental leadership though, has meant it lost some momentum but the commitment to data reform is still high on the government’s agenda.
6 – Digital Identity and Attributes Trust Framework
In June, the Trust Framework went from Alpha to Beta and with it the first cohort of IDSP (which included Credas) became certified. The Framework sets out standards that organisations wishing to facilitate the digital identity process must meet paving the way for the widespread adoption of Digital IDs in the UK.
Here’s a more detailed explanation of What is the DIATF?
7 – SRA increases AML fining power
In July, the SRA received additional powers that allowed them to fine law firms up to £25,000 without having to consult the Solicitors Disciplinary Tribunal (SDT). Previously the SRA could only fine firms £2,000 without referring to the SDT. The change was opposed by the Law Society due to a lack of transparency on SRA decisions. The Economic Crime Act could see the removal of this cap completely if the matter relates to money laundering and economic crime.
8- Register of Oversea Entities
Effective from 1 August 2022, overseas entities who own land or property in the UK are required to provide greater transparency over their ultimate ownership to crack down on money laundering. The regulations apply retrospectively from the 1st Jan, 1999, in England/Wales and 8th Dec, 2014, in Scotland. The deadline for registration is 31 January 2023.
9 – New SARs portal
In August, the NCA hosted a webinar showcasing their revamped SARs portal. The new portal uses the government’s tried and tested UI framework making it a lot more user-friendly than the current version. Some users have started the migration process with the aim stated in the webinar to move everyone over by the end of Feb 2023. Watch the webinar here: https://register.gotowebinar.com/recording/1136521614473239056
10 – Right to Work/Rent changes
In October, the Covid-19 adjusted Right to Work/Rent processes that allowed businesses to verify candidates via video calls/conferences came to an end. Instead, businesses wishing to continue remote verification are recommended to use an Identity Service Provider that is certified against the UK DIATF.
11 – HMRC AML fines
In October, HMRC released a statement targeted at Estate Agents for a lack of AML compliance. HMRC revealed that 68 estate agents had been penalised for not complying with money laundering regulations resulting in more than £500,000 in fines. Over the last year, the average fine for lack of AML compliance handed to the estate agency sector increased by 63.7% as HMRC tripled its number of interventions.
12 – Crypto Regulations
Following the implosion of FTX, the Financial Times has reported that the government is finalising plans to regulate the cryptocurrency market. FTX’s collapse left creditors owed almost £2.5bn and its owner Sam Bankman-Fried Is facing wire fraud and money laundering charges in the US after being accused of funnelling customer cash into his investment firm Alameda.
The FCA was given the power at the beginning of the year to inspect the money-laundering controls of UK-based crypto companies, but new regulations seem set to grant it even further powers as part of the new Financial Services and Markets bill.