HM Treasury Publications: anti-money laundering and the Payments Accounts Directive

Written on 2 Dec 2015

HM Treasury has recently released two publications that will be of interest to those in the payments industry: on 12 November 2015 an advisory note on money laundering and terrorist financing controls and on 16 November 2015, a summary of responses to its consultation on the Payments Accounts Directive (PAD). 

Advisory Notice on Money Laundering and Terrorist Financing controls in Overseas Jurisdictions 

On 23 October 2015 the Financial Action Task Force (FATF) published two statements identifying jurisdictions with strategic deficiencies in their anti-money laundering and counter terrorist financing regimes. 

In response to these statements, HM Treasury advises firms to:

1. Consider the following jurisdictions as high risk for the purposes of the Money Laundering Regulations 2007, and so advises firms to apply enhanced due diligence measures in accordance with the risks:

  • Democratic Peoples Republic Korea;
  • Iran; and
  • Myanmar.

2. Take appropriate actions in relation to the following jurisdictions to minimise the associated risks, which may include enhanced due diligence measures in high risk situations:

  • Afghanistan;
  • Algeria;
  • Angola;
  • Bosnia and Herzegovina;
  • Guyana;
  • Iraq;
  • Lao People’s Democratic Republic;
  • Panama;
  • Papua New Guinea;
  • Syria;
  • Uganda; and
  • Yemen. 

Summary of responses and draft regulations on implementing PAD 

In our previous Payments Update, we discussed the launch of HM Treasury’s consultation on the steps the government proposes to take in transposing PAD in the UK. Having concluded the consultation, the government has published a response document that summarises the main issues raised by respondents and outlines the government’s response. 

The government has also published the final legislation, the Payment Accounts Regulations 2015. The legislation will be subject to approval by both Houses of Parliament before it is made and comes into effect from September 2016. 

After the regulations have been made, the Financial Conduct Authority will consult in the usual manner on any rule changes it considers necessary to give effect to them. The Payment Systems Regulator will consider the appropriate designation and monitoring process and is expected to provide further information on this in due course.