Regulation  

Transparency is critical for anti-money laundering to work

The "5th"MLD measures – seismic changes? 

Politically exposed persons register 

At the same time that the UK is implementing 4MLD, Europe is considering further measures to aid transparency and to assist law enforcement.  These include requiring member states to have in place a central register of politically exposed persons available to law enforcement investigators and the entities subject to the regulation while also making limited information from the register of beneficial ownership of express trusts available to the public.  

The central register of bank accounts 

Probably the most far reaching European measure, and the one causing significant concerns for banks regarding its operation, is the proposal to require each member state to have a central register of bank accounts.

This proposed register would identify all payment accounts held by banks and building societies and will only be accessible to investigating authorities (both domestic and within European member states).

While potentially a valuable resource for law enforcement when conducting any asset tracing exercise it will very likely present a sizeable task for the banks to produce the data which is to be incorporated within such a register.

Even where the source data can be generated by the banks, there are understandable concerns as to the mechanisms which will be used to share such sensitive information and the onus which is to be placed on the banks to ensure that the information contained on such a register is current. Given the very real threat presented by cyber criminals, the transfer and retention of so much sensitive data does present a very real risk.

Irrespective of what happens with Brexit, it is likely that the UK will implement at least some of the provisions agreed at European level relating to money laundering. This is because the government has made much of its global leadership in tackling corruption and other financial crime. It would appear contrary to such a claim to then reject measures that Europe has deemed necessary to tackle these particular scourges. 

A new measure affecting property?

Finally, with a proposal harking back to a policy announcement issued by David Cameron at the International Anti-Corruption Summit he hosted in London in May 2016, the government has recently opened a further consultation on its proposal for the creation of a register of the beneficial ownership of overseas companies that own, or want to buy, property in the UK.  This proposal aims to ensure that the person or persons who ultimately own property within the UK are identified and recorded on a central register held at Companies House.  This has the potential to add considerable transparency to the ownership of significant portions of the UK, and particularly the London, property market.