What the new regulations require:

The Money Laundering Regulations 2007 were published by the Treasury in July, and will come into force on 15 December 2007. They implement the Third EU Money Laundering Directive, and replace the 2003 regulations in their entirety.

They create a new duty for regulated firms to undertake “customer due diligence”. That means it is no longer enough just to obtain evidence of identity. Amongst other things, you must -
- conduct on-going monitoring of your clients, including the source of their funds
- take steps to identify “politically exposed persons” and take extra precautions if you act for such a person
- establish the “purpose and nature” of transactions
- identify the “beneficial owner” of assets involved in a transaction
- ensure your staff apply measures on a “risk sensitive basis”.

Other changes include new provisions about contracting out identification processes to specialist service providers, and allowing firms to rely on identification carried out by other regulated businesses.

There are numerous other changes.