Miscellaneous Politically exposed persons: money laundering and terrorist financing Amendment to the Money Laundering Regulations
The MLRs set out requirements for regulated firms (such as banks, lawyers and accountants) to implement when providing regulated services to any PEP and known close associates and family members of PEPs. They require all firms to take a risk-based approach to their compliance with regard the requirements of the Regulations, assessing the risk of their customers and implementing proportionate policies, controls and procedures.
	The guidance on the treatment of PEPs, published by the FCA in 2017, provides support to firms in applying a risk-based approach to PEPs, including specific risk indicators which firms may use to inform their anti-money laundering controls. The guidance is clear that PEPs who are entrusted with a prominent public function in the UK should be treated as low risk, unless a firm has assessed that other risk factors not linked to their position as a PEP mean they pose a higher risk.
	Section 77 requires HM Treasury to amend the MLRs within twelve months of Royal Assent to recognise the distinction between the general risk of domestic and non-domestic PEPs in law. This will ensure additional clarity on the approach firms should take when their customer is a domestic PEP or the family member or known close associate of a domestic PEP.
	HM Treasury is also required to, within six months of Royal Assent, lay before Parliament a statement setting out what progress has been made towards making the regulations amending the MLRs.