Sanctions and Anti-Money Laundering Bill (HC Bill 176)

Sanctions and Anti-Money Laundering BillPage 50

amount, quantity or value in excess of a prescribed amount, quantity or
value.

19 Regulations which include provision for a purpose mentioned in Part 1 may
describe technology wholly or partly by reference to—

(a) 5the uses to which the technology may be put,

(b) the industries, sectors, infrastructure or projects to which the
technology may relate, or

(c) any activities carried on, or proposed to be carried on, to which the
technology may relate.

20 10Regulations which include provision for a purpose mentioned in Part 1 may
describe services wholly or partly by reference to—

(a) the uses to which the services may be put,

(b) the industries, sectors, infrastructure or projects to which the services
may relate,

(c) 15any goods, technology or land to which the services may relate,

(d) any activities carried on, or proposed to be carried on, to which the
services may relate (including the export, import, movement,
transfer, making available, acquisition, development, manufacture,
production, maintenance or use of goods, technology or land), or

(e) 20any other services to which the services in question may relate.

21 Regulations which include provision for a purpose mentioned in Part 1 may
include provision having the effect that references to specified provisions of
orders made under the Export Control Act 2002 are to operate as references
to specified provisions of such orders as amended from time to time.

22 25Regulations which include provision for a purpose mentioned in Part 1 may
include provision having the effect that references to a specified Annex of
Council Regulation (EC) No 428/2009 of 5 May 2009 (setting up a
Community regime for the control of exports, transfer, brokering and transit
of dual-use items) are to operate as references to that Annex as amended
30from time to time.

23 Regulations which include provision for a purpose mentioned in Part 1 may
include provision having the effect that references to a technical list of goods
or technology (including a list by reference to which any UN obligation
operates) are to operate as references to that list as revised or re-issued from
35time to time.

24 Regulations which include provision for a purpose mentioned in paragraph
2 may include provision in relation to the removal from the United Kingdom
of vehicles, ships and aircraft (as an export of goods), whether or not they are
moving under their own power or carrying goods or passengers.

25 40Regulations which include provision for a purpose mentioned in paragraph
3 may include provision in relation to the taking into the United Kingdom of
vehicles, ships and aircraft (as an import of goods), whether or not they are
moving under their own power or carrying goods or passengers.

26 (1) This paragraph applies where regulations include provision for a purpose
45mentioned in paragraph 15 in relation to ships designated by the Security
Council or a subsidiary organ of the Security Council for purposes of a UN
Security Council Resolution.

Sanctions and Anti-Money Laundering BillPage 51

(2) The provision may describe the ships by reference to the instrument in
which the ships are designated, including by reference to that instrument as
varied or supplemented from time to time.

Enforcement

27 (1) 5This paragraph applies in relation to any provision of CEMA which specifies
a maximum period of imprisonment with which an offence is punishable on
conviction on indictment.

(2) Regulations under this paragraph may modify any such provision in the
case of an offence committed in connection with a prohibition or
10requirement—

(a) imposed for a purpose mentioned in Part 1, and

(b) specified in the regulations.

(3) The modification may not have the effect that such an offence is punishable
with imprisonment for a period exceeding 10 years.

15Restriction

28 Regulations may not contain prohibitions for a purpose mentioned in Part 1
which have the effect of prohibiting any of the following activities—

(a) the communication of information in the ordinary course of scientific
research,

(b) 20the making of information generally available to the public, or

(c) the communication of information that is generally available to the
public,

unless the interference by the regulations in the freedom to carry on the
activity in question is necessary (and no more than is necessary).

29 25The question whether any such interference is necessary is to be determined
by the appropriate Minister making the regulations—

(a) by reference to the circumstances prevailing at the time the
regulations are made, and

(b) having considered the purpose of the regulations as stated under
30section 1(3) and the need to respect the freedom to carry on that
activity.

Interpretation

30 In this Schedule, any reference to goods, technology, land or services being
moved, made available, acquired, provided or procured is to their being
35moved, made available, acquired, provided or procured (as the case may be)
directly or indirectly.

31 For the purposes of this Schedule—

(a) “export” means export from the United Kingdom,

(b) goods removed to the Isle of Man from the United Kingdom are not
40to be regarded as exported, and

(c) goods transported out of the United Kingdom by aircraft or ship as
stores within the meaning of CEMA (see section 1(1) and (4) of that
Act) are to be regarded as exported.

32 For the purposes of this Schedule—

Sanctions and Anti-Money Laundering BillPage 52

(a) “import” means import into the United Kingdom, but

(b) goods removed to the United Kingdom from the Isle of Man are not
to be regarded as imported.

Sub-paragraph (a) does not apply for the purposes of paragraph 33.

33 5Paragraph 32(b) does not apply to goods imported into the Isle of Man in
contravention of any prohibition or requirement and which are of a
description the import of which into the United Kingdom is subject to a
corresponding prohibition or requirement imposed by regulations for a
purpose mentioned in paragraph 3.

34 10For the purposes of this Schedule—

(a) goods, technology or land are “acquired” by a person if the person
buys, leases, hires, borrows or accepts as a gift the goods, technology
or land (as the case may be), and “acquisition” is to be construed
accordingly, and

(b) 15a reference to goods which “originate” in a country includes a
reference to goods which are manufactured or produced in that
country.

35 In paragraph 5 “place” includes—

(a) any vehicle, ship or aircraft,

(b) 20any installation (including a floating installation or one resting on
the seabed or its subsoil or on other land covered with water or its
subsoil), or

(c) any tent or movable structure.

36 In this Schedule—

  • 25“aircraft” includes unmanned aircraft and aircraft capable of
    spaceflight activities;

  • CEMA” means the Customs and Excise Management Act 1979;

  • “objects of cultural interest” includes objects of historical or scientific
    interest;

  • 30“regulations” means regulations under section 1;

  • “ship” includes every description of vessel (including a hovercraft)
    used in navigation;

  • “specified ship” has the meaning given by section 14;

  • “technology” means information (including information comprised in
    35software) that is capable of use in connection with—

    (a)

    the development, production or use of any goods or
    software, or

    (b)

    the development of, or the carrying out of, an industrial or
    commercial activity or an activity of any other kind
    40whatsoever;

  • “transfer”, in relation to any technology, means a transfer by any means
    (or combination of means), including oral communication and the
    transfer of goods on which the technology is recorded or from which
    it can be derived, other than the export of such goods.

37 45Nothing in section 3 prevents any reference to services in this Schedule from
including financial services.

Sanctions and Anti-Money Laundering BillPage 53

Section 44

SCHEDULE 2 Money laundering and terrorist financing etc

Regulations under section 44

1 Without prejudice to the generality of section 44, regulations under that
5section may do any thing mentioned in paragraphs 2 to 17.

2 (1) Require—

(a) the Secretary of State or the Treasury, or both of them acting jointly,

(b) supervisory authorities (within the meaning given by paragraph 24),
and

(c) 10such persons carrying on relevant business (within the meaning
given by that paragraph) as are prescribed for the purposes of this
paragraph,

to identify and assess risks relating to money laundering, terrorist financing
or other threats to the integrity of the international financial system.

(2) 15Make provision about factors to be taken into account in the assessment of
such risks.

3 Require any person carrying on relevant business who is of a description
prescribed for the purposes of this paragraph (“a relevant person”) to have
policies, controls and procedures which—

(a) 20are policies, controls and procedures for mitigating and managing
risks relating to money laundering, terrorist financing or other
threats to the integrity of the international financial system,

(b) are of prescribed kinds, and

(c) are appropriate having regard to the size and nature of the business
25that the person carries on.

4 Require relevant persons to take prescribed measures in relation to their
customers in prescribed circumstances.

5 Make provision for and in connection with—

(a) the provision of information by prescribed persons, and

(b) 30the disclosure of information, including provision about—

(i) the purposes for which information held in connection with
anything done under the regulations may be used, and

(ii) the persons to whom any such information may be disclosed.

6 Make provision for and in connection with the creation, production and
35retention of—

(a) registers, and

(b) records,

including registers of people with significant control and registers and
records relating to the beneficial ownership of prescribed entities, trusts or
40other arrangements.

7 (1) Confer supervisory functions on the Financial Conduct Authority, the
Commissioners for Her Majesty’s Revenue and Customs and such other
bodies as may be prescribed (“supervisory authorities”) in relation to
relevant persons, including powers or duties to—

(a) 45collect information,

Sanctions and Anti-Money Laundering BillPage 54

(b) give directions,

(c) issue guidance,

(d) approve individuals in their capacity as relevant persons or as owner
of, or in positions of control over or responsibility in, relevant
5persons that are not individuals, and

(e) cooperate with other supervisory authorities or other prescribed
persons.

(2) Make provision about the exercise of functions conferred on supervisory
authorities under sub-paragraph (1).

8 (1) 10Confer supervisory functions on a prescribed body (an “oversight body”) in
relation to bodies prescribed as, or seeking to be prescribed as, supervisory
authorities, including powers or duties to—

(a) collect information,

(b) give directions,

(c) 15issue guidance, and

(d) give recommendations as to whether bodies should be, or should
cease to be, prescribed as supervisory authorities.

(2) Make provision about the exercise of functions conferred on an oversight
body under sub-paragraph (1).

9 20Make provision for and in connection with the registration of relevant
persons by supervisory authorities, including—

(a) provision which prohibits a person from carrying on a business of a
prescribed description unless registered, and

(b) provision about the suspension or cancellation of a person’s
25registration.

10 Make provision enabling supervisory authorities to enter into arrangements
with other bodies for the purposes of the enforcement of the regulations.

11 (1) Confer investigatory powers on—

(a) supervisory authorities, and

(b) 30prescribed enforcement partners within the meaning given by
paragraph 24.

(2) Make provision about the exercise of investigatory powers.

(3) Make provision enabling investigatory powers to be exercised by a
supervisory authority in relation to persons supervised by another
35supervisory authority.

(4) In this paragraph “investigatory powers” includes powers of entry, search,
inspection, seizure of documents or information and retention of documents
or information.

12 (1) Authorise supervisory authorities to impose charges on persons supervised
40by them in respect of expenses incurred for the purposes of the regulations.

(2) Make provision in connection with any charges for which provision is made
under sub-paragraph (1), including provision for charges to meet expenses
incurred by enforcement partners for the purposes of the regulations.

(3) Where provision is made by virtue of paragraph 11(3), authorise
45supervisory authorities to impose charges on other supervisory authorities

Sanctions and Anti-Money Laundering BillPage 55

in respect of expenses incurred in relation to the exercise of powers in
accordance with such provision.

(4) Authorise an oversight body to impose charges on supervisory authorities
or persons seeking to be prescribed as supervisory authorities in respect of
5the exercise by the oversight body of functions conferred on it by the
regulations.

(5) Make provision in connection with any charges for which provision is made
under sub-paragraph (3) or (4).

13 (1) Authorise the Financial Conduct Authority and the Commissioners for Her
10Majesty’s Revenue and Customs to impose civil monetary penalties in
relation to the contravention of prescribed requirements.

(2) Authorise supervisory authorities to impose civil penalties (other than
monetary penalties) in relation to the contravention of prescribed
requirements, including—

(a) 15the publication of statements of censure,

(b) the suspension or revocation of, or restrictions on, any permission or
authorisation granted by a supervisory authority,

(c) the suspension or cancellation of, or restrictions on, a person’s
registration as mentioned in paragraph 9, and

(d) 20restrictions on the holding of management responsibilities.

(3) Authorise an oversight body to—

(a) impose civil monetary penalties, and

(b) publish statements of censure,

in relation to the contravention of prescribed requirements by supervisory
25authorities.

(4) Make provision in connection with any civil penalties for which provision is
made under sub-paragraph (1), (2) or (3), including provision for publishing
details of persons who have incurred penalties.

14 Make provision for and in connection with the grant of injunctions (or, in
30Scotland, interdicts) and other orders by prescribed courts in relation to the
contravention of prescribed requirements.

15 Make provision—

(a) creating criminal offences for the purposes of the enforcement of
requirements imposed by or under regulations under section 44, and

(b) 35dealing with matters relating to any offences created for such
purposes by regulations under section 44,

but see paragraphs 18 and 19.

16 Make provision for and in connection with reviews of, and appeals against,
decisions of—

(a) 40prescribed supervisory authorities, and

(b) an oversight body.

17 Make provision exempting prescribed persons from prescribed
requirements, generally or in prescribed circumstances.

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Criminal offences: restrictions and relationship with civil penalties

18 Regulations under section 44 may not provide for an offence created by such
regulations to be punishable with imprisonment for a period exceeding—

(a) in the case of conviction on indictment, 2 years;

(b) 5in the case of summary conviction, 3 months.

19 Regulations under section 44 may provide for the creation of a criminal
offence only if the regulations also provide for either or both of the following
in relation to the offence—

(a) a mental element necessary for its commission;

(b) 10a defence to it (for example, a defence grounded on a person’s
knowledge or belief, or a defence that a person took all reasonable
steps and exercised all due diligence).

20 Regulations under section 44 which confer a power to impose a civil
monetary penalty must provide that a person is not liable to such a penalty
15in respect of acts or omissions for which the person has been convicted of a
criminal offence created by such regulations.

Report in respect of offences in regulations

21 (1) In this paragraph “relevant regulations” means regulations under section 44
which create any offence for the purposes of the enforcement of any
20requirements imposed by or under regulations under section 44.

(2) The appropriate Minister making any relevant regulations (“the Minister”)
must at the required time lay before Parliament a report which—

(a) specifies the offences created by the regulations, indicating the
requirements to which those offences relate,

(b) 25states that the Minister considers that there are good reasons for
those requirements to be enforceable by criminal proceedings and
explains why the Minister is of that opinion, and

(c) in the case of any of those offences which are punishable with
imprisonment—

(i) 30states the maximum terms of imprisonment that apply to
those offences,

(ii) states that the Minister considers that there are good reasons
for those maximum terms, and

(iii) explains why the Minister is of that opinion.

(3) 35Sub-paragraph (4) applies where an offence created by the regulations
relates to particular requirements and the Minister considers that a good
reason—

(a) for those requirements to be enforceable by criminal proceedings, or

(b) for a particular maximum term of imprisonment to apply to that
40offence,

is consistency with another enactment relating to the enforcement of similar
requirements.

(4) The report must identify that other enactment.

(5) In sub-paragraph (3) “another enactment” means any provision of or made
45under an Act, other than a provision of the regulations to which the report
relates.

Sanctions and Anti-Money Laundering BillPage 57

(6) In sub-paragraph (2) “the required time” means the same time as the draft of
the statutory instrument containing the regulations is laid before
Parliament.

(7) This paragraph applies to regulations which amend other regulations under
5section 44 so as to create an offence as it applies to regulations which
otherwise create an offence.

Extra-territorial application

22 (1) Regulations under section 44 may impose requirements in relation to
conduct outside the United Kingdom by a United Kingdom person.

(2) 10In sub-paragraph (1) “United Kingdom person” means—

(a) a United Kingdom national,

(b) a body incorporated or constituted under the law of any part of the
United Kingdom, or

(c) a body within paragraph (3) or (4) of regulation 9 of the Money
15Laundering Regulations 2017 (bodies to be regarded for the
purposes of those Regulations as carrying on business in the United
Kingdom), as that regulation has effect immediately before it is
saved by section 2 of the European Union (Withdrawal) Act 2018.

(3) For this purpose a United Kingdom national is an individual who is—

(a) 20a British citizen, a British overseas territories citizen, a British
National (Overseas) or a British Overseas citizen,

(b) a person who under the British Nationality Act 1981 is a British
subject, or

(c) a British protected person within the meaning of that Act.

(4) 25In this paragraph “conduct” includes acts and omissions.

Money Laundering Regulations 2017

23 (1) Without prejudice to anything in section 44, paragraphs 1 to 22 or section
48(2), regulations under section 44 may—

(a) subject to any modifications the appropriate Minister making the
30regulations considers appropriate, make provision corresponding or
similar to any provision of the Money Laundering Regulations 2017,
as those Regulations have effect immediately before they are saved
by section 2 of the European Union (Withdrawal) Act 2018;

(b) amend or revoke the Money Laundering Regulations 2017.

(2) 35In paragraph 15 (offences), any reference to regulations under section 44
includes the Money Laundering Regulations 2017.

(3) In paragraph 21 (report in respect of offences)—

(a) the reference in sub-paragraph (1) to requirements imposed by or
under regulations under section 44 includes requirements imposed
40by or under the Money Laundering Regulations 2017, and

(b) the reference in sub-paragraph (7) to other regulations under section
44 includes the Money Laundering Regulations 2017.

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Interpretation

24 In this Schedule—

  • “enforcement partners” means bodies with which supervisory
    authorities enter into arrangements for the purposes of the
    5enforcement of regulations under section 44;

  • “money laundering” has the meaning given by section 44;

  • “Money Laundering Regulations 2017” means the Money Laundering,
    Terrorist Financing and Transfer of Funds (Information on the
    Payer) Regulations 2017 (S.I. 2017/692S.I. 2017/692);

  • 10“oversight body” means a body on which functions are conferred under
    paragraph 8(1);

  • “relevant business” means business of a kind which entails risks
    relating to money laundering, terrorist financing or other threats to
    the integrity of the financial system;

  • 15“relevant person” means a person on whom requirements are imposed
    under paragraph 3;

  • “requirements” includes prohibitions;

  • “supervisory authority” means the Financial Conduct Authority, the
    Commissioners for Her Majesty’s Revenue and Customs or any
    20other body on which functions are conferred under paragraph 7(1);

  • “terrorist financing” has the meaning given by section 44.

Section 52(4) and (5)

SCHEDULE 3 Consequential amendments

Part 1 25Amendments consequential on Parts 1 and 2

Immigration Act 1971 (c. 77)1971 (c. 77)

1 (1) Section 8B of the Immigration Act 1971 (persons excluded from the United
Kingdom under international obligations) is amended as follows.

(2) In the heading for “international obligations” substitute “certain
30instruments”.

(3) For subsection (4) substitute—

(4) “Excluded person” means—

(a) a person named by or under, or of a description specified in,
an instrument falling within subsection (5), or

(b) 35a person who under regulations under section 1 of the
Sanctions and Anti-Money Laundering Act 2018 is an
excluded person for the purposes of this section (see section
4 of that Act).”

(4) In subsection (5A)(b), for the words from the beginning to “that subsection”
40substitute “the person is within subsection (4)(a) and not within subsection
(4)(b) and has been exempted from the application of subsection (1), (2) or
(3), as the case may be,”.

Sanctions and Anti-Money Laundering BillPage 59

(5) After subsection (5A) insert—

(5B) In relation to any person within subsection (4)(b), subsections (1) to
(3) are subject to any exception created under, or direction given by
virtue of, section 15(4) of the Sanctions and Anti-Money Laundering
5Act 2018 (power to create exceptions etc).”

Senior Courts Act 1981 (c. 54)1981 (c. 54)

2 In paragraph 2 of Schedule 1 to the Senior Courts Act 1981 (business
allocated to the Queen’s Bench Division), after sub-paragraph (be) insert—

(bf) all proceedings—

(i) 10on an application under section 34 of the Sanctions
and Anti-Money Laundering Act 2018 (court review
of decisions), or

(ii) on a claim arising from any matter to which such an
application relates;”.

15Regulation of Investigatory Powers Act 2000 (c. 23)2000 (c. 23)

3 (1) Section 18 of the Regulation of Investigatory Powers Act 2000 (exceptions to
matters excluded from legal proceedings) is amended as follows.

(2) In subsection (1), after paragraph (de) insert—

(df) any proceedings—

(i) 20on an application under section 34 of the Sanctions
and Anti-Money Laundering Act 2018 (court review
of decisions), or

(ii) on a claim arising from any matter to which such an
application relates,

25or any proceedings arising out of such proceedings;”.

(3) In subsection (2), after paragraph (zd) insert—

(ze) in the case of proceedings falling within paragraph (df), to—

(i) a person, other than the Secretary of State or the
Treasury (as the case may be), who is or was a party
30to the proceedings, or

(ii) any person who for the purposes of the proceedings
(but otherwise than by virtue of appointment as a
special advocate) represents a person falling within
sub-paragraph (i);”.

35Serious Organised Crime and Police Act 2005 (c. 15)2005 (c. 15)

4 In section 61(1) of the Serious Organised Crime and Police Act 2005 (offences
to which investigatory powers etc apply), after paragraph (i) insert—

(j) any offence under regulations under section 1 of the
Sanctions and Anti-Money Laundering Act 2018 (sanctions
40regulations) which is specified by those regulations by virtue
of section 17(8) of that Act.”