Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, on what evidential basis his Department has chosen to exclude from the scope of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 each type of business referred to.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) have implemented the EU’s 4th Money Laundering Directive (4MLD). The directive (and therefore the MLRs) is underpinned by the principles of effectiveness and proportionality as well as a continued focus on a risk-based approach. Therefore, the MLRs apply to only those sectors that are reasonably susceptible to the risks of money laundering and terrorist financing and that are seen as ‘gatekeepers’ to the financial system. In considering which sectors are susceptible and therefore higher or lower risk, this could mean looking at, for example, supervisory information on risks within the sector, any steps taken by industry to mitigate these risks, the level of law enforcement and any evidence submitted during government consultations.

For more information on why the Government has decided to exclude certain sectors from the scope of the MLRs, please see the Government’s consultation response of March 2017:

https://www.gov.uk/government/consultations/money-laundering-regulations-2017/money-laundering-regulations-2017

As per Regulation 16 of the MLRs, the Government will continue to identify and review the risks in relation to money laundering and terrorist financing with a view to mitigating those risks within the United Kingdom.