The EU Fifth Anti-money Laundering Directive was enacted into UK law with effect from 10 January 2020. It requires art businesses to implement systems intended to prevent their potential use in money laundering or for various other offences. The rules apply to those trading, storing or acting as intermediaries in works of art, where the value involved is more than €10,000. This is a significant extension to the existing rules.
The Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2020 were laid before Parliament on 15 September 2020. Among other things, this statutory instrument (SI) implements the new Trust Registration Service (TRS) rules, as extended by the EU Fifth Money Laundering Directive, which came into force on 10 January 2020. The SI is expected to be implemented as drafted.
The government has published its response to the technical consultation on the implementation of the EU Fifth Money Laundering Directive (5MLD) and the Trust Registration Service (TRS). The government appreciated that the broad scope of the changes to the TRS proposed in 5MLD raised concerns in the United Kingdom, and this understanding was reflected in its technical consultation.
The implementation of the Common Reporting Standard and other data exchange regimes means that Her Majesty's Revenue and Customs (HMRC) is receiving substantial information about the global tax affairs of persons with connections to the United Kingdom, which will enable it to target those who may have failed to declare all of their tax liabilities accurately. One way in which HMRC is following up on the information obtained is through nudge letters, which it continues to issue despite the COVID-19 crisis.
The EU Fifth Anti-money Laundering Directive (5AMLD) has been enacted into UK law with effect from 10 January 2020, with the exception of proposed changes to the Trust Registration Service (TRS). These changes were delayed to permit a technical consultation on the draft legislation to take place between 24 January 2020 and 21 February 2020. The proposed changes to the TRS resulting from 5AMLD would significantly increase the scope of trusts that require registration.
The Finance (No 2) Act 2017 contains provisions requiring the disclosure of historic non-compliance to Her Majesty's Revenue and Customs by September 30 2018 (ie, the requirement to correct rule). This is part of a range of legislation targeting offshore tax evasion. Defences for failing to comply with the requirement to correct are limited and it may be insufficient to have relied on legal or tax advice. Prompt action is required to potentially avoid very significant penalties.
Her Majesty's Revenue and Customs (HMRC) recently issued an updated set of frequently asked questions (FAQs) regarding the new online Trust Registration Service and the information that certain trustees must maintain and report. In addition, HMRC confirmed further extensions to the deadlines for the registration of trusts with its online service. Details of the availability of the relevant online services have also been included in the FAQs.