Monthly Archives: October 2021

Modernising Lasting Powers of Attorney

The Ministry of Justice (MoJ) and the Office of the Public Guardian (OPG) jointly initiated a project to modernise the process of making and registering lasting powers of attorney (LPAs) in England and Wales in November 2020. STEP was invited to sit on the Modernising Lasting Powers of Attorney (MLPA) stakeholder working group and has attended various workshops over the past six months to help shape and develop the consultation.

The consultation deadline recently passed on 13th October and STEP has submitted a formal response. The consultation seeks views on seven specific proposals that the government is considering and a summary follows below of STEP’s response to each proposal.

Proposal One, Role of witness, considers the role and value of witnesses and how to keep that value.

The OPG proposes to remove the need for a witness and/or replace the witness with new safeguards that perform the same function. STEP strongly opposes the suggestion that the protection provided by witnesses’ offers little or no value to the process. LPAs should retain their status and safeguard as a legal deed with the requisite formalities and all signatures should be witnessed by independent witnesses.

Proposal Two, Role of application, considers the role of applying to register an LPA and who can apply.

We agree that there are benefits to the proposal to digitally check the registrations, particularly in reducing the chance of delay and rejection. We also feel strongly that a paper version and application process should remain available to the elderly or vulnerable who have no internet access or IT facilities. We stress that even if ID verification online is technologically robust, there will be a small demographic, usually the more elderly, that do not have access to a computer or smartphone for verification.

Proposal Three, OPG remit, considers the OPG’s remit and examines how to widen it so that it can verify people’s identity and stop or delay an LPA’s registration if it has concerns about it.

We agree that there needs to be more advanced identity checks for donors, which would consequently improve safeguards, since identity fraud and theft are currently accessible. We suggest that the OPG should require suitable identification for all parties to the LPA including passport details and address confirmation. We also advise that indemnity bond insurance, subject to a minimum value set at a relatively low amount by the OPG, should be in place for all attorneys in case of malfeasance, fraud or similar wrongdoing.

Proposal Four, How to object, considers how people can object to an LPA and how to simplify the current process so people can more easily understand where to send objections and how to do so.

We agree with the proposal that anyone should be able to object to an LPA at any time. However we have suggested that this course of action should be aligned with a signposting and public awareness campaign detailing the limits of attorneys’ powers.

Proposal Five, When to object, considers when people can object and examines at what point and for how long objections can be made before an LPA is registered.

We suggest that the time should be shortened between an LPA being sent for registration and it being placed onto the register. We propose that a two-week waiting period plus one week for processing would be appropriate with a total four-week deadline for an online or paper return.

Proposal Six, Speed of service, considers the speed of the LPA service and whether a dedicated faster service should be introduced for people who need an LPA urgently.

We believe that an urgent service would provide additional benefits. If the service is implemented we suggest that the specific reason for the urgency should be shown, with a limited tick-box menu, and the requisite proof should be required by the OPG. However, we reinforce that if the overall registration period is reduced (proposal Five) then the number of cases where urgent service would be required would be very low.

Proposal Seven, Solicitor access to the service,considers solicitors’ access to the service.

The online service is welcomed, subject to the retained safeguards. However, the current inability to save the online deed to the relevant client file is a significant disadvantage to this system, and this needs to be addressed before this procedure becomes compulsory for practitioners. We understand that this service will be accessible by other professionals, such as estate planners, will writers, charities etc. and not just solicitors, which is important.

We also recommend that dropdown menus are included in the online deeds, including precedent clauses with wording approved by the OPG and the relevant expert professional bodies, to cover matters such as continuing to be able to use or to set up an investment management arrangement with a discretionary fund manager. This would benefit all, including lay applicants. STEP has also reinforced that it is essential that any new online system is securely piloted within the industry before it is implemented.

STEP’s full response to the consultation can be found here and we will keep member apprised of any further developments in this area.

Emily Deane TEP Technical Counsel

EU announces Anti-Money Laundering (AML) Package 2021

Money Laundering and the efforts of governments to combat it and increase transparency and reporting of ownership globally continue to be a hot topic.

One body that has been looking at this area is the European Union, which is in the process of launching its new Anti-Money Laundering (AML) Package 2021.

This package was explored in detail at a recent webinar hosted by Anti-Money Laundering Europe (AME). The main objectives of the Package are to support:

  • Greater harmonisation of transposing EU AML and countering the funding of terrorism (CFT) law into national law,
  • Greater supervision at EU level, and
  • Better coordination of financial intelligence units (FIUs).

Paolo Panico TEP, Chair of STEP Europe, chaired the panel, which comprised:

  • Steve Ryan, Deputy Head of Unit D2, DG FISMA at the European Commission
  • Endija Springe, Policy Expert at the European Banking Authority (EBA), and
  • Anabela Santos, Technical Consultant at the Portuguese Chartered Accountants Association.

The panel discussed the European Commission’s new AML Package 2021, which delivers on the Commission’s action plan of 7 May and was put forward on 20 July for discussion by the European Parliament and Council. The EU’s intention is to achieve the Package through regulation, a new directive and a new AML authority.

These rules will include customer due diligence, harmonised beneficial ownership requirements and clear reporting obligations. There would be further alignment with the Financial Action Task Force (FATF), with the EU also creating a black list and grey list (as FATF does). A listing by FATF will also now trigger an EU listing and obligatory enhanced due diligence (EDD) and countermeasures proportionate to risks stemming from the relevant country.

The announcement of the Sixth Anti-Money Laundering Directive, ((EU) 2018/1673) or AMLD6, is another part of the Package. The Directive will have stronger mechanisms at national level and will:

  • Govern the tasks and powers of supervisors
  • Give public oversight over self-regulatory bodies
  • Have joint analysis of Financial Information Units (FIUs), and
  • Grant powers for beneficial ownership registers to carry out checks and issue sanctions.

The other part of the Package was the new AML authority (AMLA), which aims to transform the landscape of AML/CFT supervision in the EU and will come into force in 2024. It will do this by:

  • Establishing a single integrated system of AML supervision across the EU based on common supervisory methodologies
  • Directly supervising some of the most risky institutions, and
  • Supporting cooperation and joint analyses by national FIUs and facilitating communication among them.

It was reported that the new regulations and AMLD6 will only start to apply in 2026 as the AMLA needs to be up and running to prepare regulatory technical standards that will complete the single rule book.

The EBA gave its support for the new framework and proposal, and asked that the Commission try to avoid silos, balance greater harmonisation with a risk-based approach and ensure effective and efficient governance of the AMLA.

Delegates also heard that a lot of work needs to be done to create effective infrastructure and avoid it being seen as a burdensome bureaucracy.

Robert Carington is Policy Executive at STEP