New Clause 27 - Money laundering offences: electronic money institutions, payment institutions and deposit-taking bodies

Part of Financial Services Bill – in the House of Commons at 3:21 pm on 13th January 2021.

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‘(1) Part 7 of the Proceeds of Crime Act 2002 (money laundering) is amended in accordance with subsections (2) to (6).

(2) In section 327(2C) (conversion or transfer of criminal property: exceptions), after “deposit-taking body” insert “, electronic money institution or payment institution”.

(3) In section 328(5) (arrangements: exceptions), after “deposit-taking body” insert “, electronic money institution or payment institution”.

(4) In section 329(2C) (acquisition, use and possession: exceptions), after “deposit-taking body” insert “, electronic money institution or payment institution”.

(5) In section 339A (threshold amounts)—

(a) in subsection (2), after “deposit-taking body” insert “, electronic money institution or payment institution”,

(b) in subsection (3), in the opening words, after “deposit-taking body” insert “, electronic money institution or payment institution”,

(c) in subsection (3)(a), for “deposit-taking body’s” substitute “body’s or institution’s”,

(d) in subsection (3)(b), for “deposit-taking body” substitute “body or institution”,

(e) in subsection (4), after “deposit-taking body” insert “, electronic money institution or payment institution”, and

(f) in subsection (8)—

(i) after “deposit-taking body” insert “, electronic money institution or payment institution”, and

(ii) after “the body” insert “or institution”.

(6) In section 340 (interpretation)—

(a) in subsection (14)—

(i) omit “or” at the end of paragraph (a), and

(ii) after paragraph (b) insert “, or

(c) a person specified, or of a description specified, in regulations made by the Treasury or the Secretary of State.”,

(b) after subsection (14) insert—

“(14A) In subsection (14)(a)—

(a) the reference to the activity of accepting deposits is a reference to that activity so far as it is, for the time being, a regulated activity for the purposes of the Financial Services and Markets Act 2000 by virtue of an order under section 22 of that Act, but

(b) the reference to a business which engages in that activity does not include a person specified, or of a description specified, in regulations made by the Treasury or the Secretary of State.

(14B) Before making regulations under subsection (14A)(b), the Treasury or the Secretary of State (as appropriate) must consult such persons likely to be affected by the regulations, or such representatives of such persons, as they consider appropriate.

(14C) ‘Electronic money institution’ has the same meaning as in the Electronic Money Regulations 2011 (S.I. 2011/99) (see regulation 2 of those Regulations).”, and

(c) at the end insert—

“(16) ‘Payment institution’ means an authorised payment institution or a small payment institution (each as defined in regulation 2 of the Payment Services Regulations 2017 (S.I. 2017/752)).”

(7) In section 459 of the Proceeds of Crime Act 2002 (orders and regulations)—

(a) in subsection (4), before paragraph (aa), insert—

“(azb) regulations under section 340(14)(c) or (14A)(b),”,

(b) before subsection (6A) insert—

“(6ZC) No regulations may be made by the Treasury or the Secretary of State under section 340(14)(c) or (14A)(b) unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.”, and

(c) in subsection (6A), before “would” insert “or of regulations under section 340(14)(c) or (14A)(b)”.’—(John Glen.)

There are exceptions to certain money laundering offences where the amounts in question fall below a prescribed threshold. The exceptions are currently available for deposit-taking bodies. This new clause extends the exceptions to electronic money institutions and payment institutions and makes changes to the meaning of deposit-taking body.

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