The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022
| Jurisdiction | UK Non-devolved |
| Citation | SI 2022/860 |
2022 No. 860
Financial Services
The Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022
Made 21th July 2022
Coming into force in accordance with regulation 1
The Treasury, in exercise of the powers conferred by sections 49 and 54(2) of, and Schedule 2 to, the Sanctions and Anti-Money Laundering Act 20181, make the following Regulations.
In accordance with section 55(5)(d) of the Sanctions and Anti-Money Laundering Act 2018 a draft of this instrument has been laid before Parliament and approved by a resolution of each House of Parliament.
PART 1
General
Citation and commencement
1.—(1) These Regulations may be cited as the Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022.
(2) The following provisions come into force 21 days after the day on which these Regulations are made—
(a)
(a) this regulation;
(b)
(b) regulation 2 (amendment of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 20172);
(c)
(c) regulation 12 (changes in control of registered cryptoasset businesses).
(3) Regulation 5 (cryptoasset transfers) comes into force on 1st September 2023.
(4) Regulation 9 (reporting of material discrepancies) and regulations 16 and 17 (amendments to primary legislation) come into force on 1st April 2023.
(5) Except as provided in paragraphs (2) to (4), these Regulations come into force on 1st September 2022.
PART 2
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
Amendment of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
2. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 are amended in accordance with regulations 3 to 15.
Removal of outdated references to the Terrorist Asset-Freezing etc. Act 2010
3. In regulation 3(1) (general interpretation)3, in the definition of “terrorist financing”, omit paragraph (d).
Formation of limited partnerships
4.—(1) For regulation 4(2) (meaning of business relationship) substitute—
“
2 A relationship where the relevant person is asked to provide one or more of the services described in regulation 12(2)(a), (b) or (d) is to be treated as a business relationship for the purpose of these Regulations, whether or not the relationship is otherwise expected to have an element of duration.
(2) For regulation 12(2)(a) (trust or company service providers) substitute—
“
(a)
(a) forming a firm;
Cryptoasset transfers
5.—(1) In the definition of “relevant person” in regulation 3(1) (general interpretation), after “6” insert “, 7A”.
(2) In regulation 8(1) (application)4, after “6” insert “, 7A”.
(3) In regulation 27 (customer due diligence)5—
(a)
(a) in paragraph (2), after “cryptoasset exchange provider of the kind referred to in paragraph (7D)” insert “or (7E), a custodian wallet provider of the kind referred to in paragraph (7E)”;
(b)
(b) after paragraph (7D) insert—
“
7E Without prejudice to paragraph (7D), a cryptoasset exchange provider and a custodian wallet provider must also apply customer due diligence measures in relation to a cryptoasset transfer which is equal to or exceeds the equivalent in cryptoassets of 1,000 euros in value (taken together with any other cryptoasset transfer which appears to be linked).
”;
(c)
(c) after paragraph (9) insert—
“
10 In this regulation, “cryptoasset” and “cryptoasset transfer” have the meanings given by regulation 64B (cryptoasset transfers: interpretation).
(4) In regulation 40 (record-keeping)6—
(a)
(a) in paragraph (2)(a), after “regulation 30A” insert “, and of regulations 64C and 64G(1)”;
(b)
(b) after paragraph (2)(b) insert—
“
(c)
(c) in the case of an inter-cryptoasset business transfer, in addition to the records referred to in sub-paragraphs (a) and (b), any documents and information received by an intermediary cryptoasset business and the cryptoasset business of a beneficiary by virtue of the obligations under regulations 64C(1), (2) and (7), or received by them pursuant to a request under regulation 64D(2)(a) or 64E(2)(a); and
(d)
(d) in the case of an unhosted wallet transfer, in addition to the records referred to in sub-paragraphs (a) and (b), any documents and information received by a cryptoasset business pursuant to a request under regulation 64G(1).
”;
(c)
(c) after paragraph (9)(d) insert—
“
(e)
(e) “beneficiary”, “cryptoasset business”, “inter-cryptoasset business transfer”, “intermediary cryptoasset business” and “unhosted wallet transfer” have the meanings given by regulation 64B.
(5) After regulation 64 (obligations of payment service providers)7insert—
“
PART 7A
Cryptoasset Transfers
Chapter 1
Application and interpretation
Application of this Part
64A.—(1) This Part applies in respect of a cryptoasset transfer which is not excluded by paragraph (2) or (3).
(2) This Part does not apply in respect of a transfer of funds within the meaning of Article 3.9 of the funds transfer regulation8.
(3) This Part does not apply to a cryptoasset transfer where both the originator and the beneficiary is a cryptoasset business acting on its own behalf.
Interpretation
64B. In this Part—
“batch file transfer” means a bundle of individual inter-cryptoasset business transfers from a single originator put together by a cryptoasset business of the originator for transmission to a cryptoasset business of a beneficiary or beneficiaries;
“beneficiary” means the intended recipient of a cryptoasset from an originator;
“cryptoasset” has the meaning given in regulation 14A(3)(a) (cryptoasset exchange providers and custodian wallet providers)9and includes a right to, or interest in, the cryptoasset;
“cryptoasset business” means a cryptoasset exchange provider or a custodian wallet provider;
“cryptoasset transfer” means an inter-cryptoasset business transfer or an unhosted wallet transfer;
“inter-cryptoasset business transfer” means a transaction carried out by two or more cryptoasset businesses which involves the making available of a cryptoasset of an originator to a beneficiary, provided that at least one of the cryptoasset businesses involved in the transaction is carrying on business in the United Kingdom in respect of the transaction (whether that is a cryptoasset business acting for the originator or a cryptoasset business acting for the beneficiary or an intermediary cryptoasset business);
“intermediary cryptoasset business” means a cryptoasset business which, in the course of an inter-cryptoasset business transfer—
(a) is not acting for the originator or the beneficiary; and
(b) receives and transmits a cryptoasset on behalf of a cryptoasset business;
“originator” means a person who owns a cryptoasset and allows a transfer of that cryptoasset;
“unhosted wallet” means software or hardware that enables a person to store and transfer a cryptoasset on their own behalf, and in relation to which a private cryptographic key is administered by that person;
“unhosted wallet transfer” means the transfer of a cryptoasset either—
(a) by an originator from an unhosted wallet to the cryptoasset business of a beneficiary, or
(b) by the cryptoasset business of the originator to the unhosted wallet of a beneficiary,
with a view to making the cryptoasset available to the beneficiary;
“unique transaction identifier” means the combination of letters, numbers or symbols determined by a cryptoasset business which permits the traceability of the transaction from the originator to the beneficiary;
“working day” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 197110in any part of the United Kingdom.
Chapter 2
Inter-cryptoasset business transfers
Information accompanying an inter-cryptoasset business transfer
64C.—(1) In respect of an inter-cryptoasset business transfer, the cryptoasset business of the originator must ensure that the cryptoasset transfer is accompanied by the information specified in paragraph (5).
(2) Where paragraph (3) applies, if the cryptoasset business of the beneficiary makes a request for the information specified in paragraph (6), the cryptoasset business of the originator must, within three working days of the request, also provide the information specified in paragraph (6).
(3) This paragraph applies where each of the cryptoasset businesses executing the inter-cryptoasset business transfer (including any intermediary cryptoasset business) is carrying on business in the United Kingdom in respect of the transaction.
(4) Where paragraph (3) does not apply and the transfer is equal to or exceeds the equivalent in cryptoassets of 1,000 euros in value (taken together with any other cryptoasset transfer which appears to be linked), the cryptoasset business of the originator must ensure that the inter-cryptoasset business transfer is also accompanied by the information specified in paragraph (6).
(5) The information specified in this paragraph is—
(a)
(a) the name of the originator and the beneficiary;
(b)
(b) if the originator or beneficiary is a firm, the registered name of the originator or beneficiary (as the case may be), or if there is no registered name, the trading name; and
(c)
(c) the account number of the originator and the beneficiary, or if there is no account number, the unique transaction identifier.
(6) The information specified in this paragraph is—
(a)
(a) if the originator is a firm—
(i) the...
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