The impact of the extended regulations

Between 2002 and 2004 the government introduced tough new rules to crack down on money laundering and the proceeds of crime. Some of these rules have now been updated and extended and those affected are required to make some changes to their existing anti-money laundering policies and procedures.

The new rules are known as the Money Laundering Regulations 2007. They replace their 2003 counterpart and became effective on 15 December 2007. In this briefing we consider how the new rules may affect you and your organisation. We begin by providing some background information on the legislation in this area and go on to consider the changes that you might see, whether you are caught by the Regulations themselves, or simply make use of the services of a business that is affected.

Money laundering - a definition

Many people imagine money launderers to be criminals involved in drug trafficking or terrorism or to be someone like Al Capone. However legislation introduced over recent years has extended significantly the definition of what most might have traditionally considered as money laundering. While the general principles remain; money laundering involves turning the proceeds of crime into apparently ‘innocent’ funds with no obvious link to their criminal origins, what has changed is that the definition now includes the proceeds of any criminal offence, regardless of the amount involved.