On Friday 24 June, I published a review of the UK’s anti-money laundering and countering the financing of terrorism (AML/CFT) regulatory and supervisory regime. This included statutory post-implementation reviews for the Money Laundering, Terrorist Financing, and Transfer of Funds (Information of the Payer) Regulations 2017 (SI 2017/692) and the Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017 (SI 2017/1301) and the review of the UK’s AML/CFT regulatory and supervisory regime; a forward looking report which includes the Government’s response to the call for evidence launched last year.
Taken together, these three documents make a thorough assessment of the UK’s money laundering controls and outline areas of focus going forward, including commitment from the Government to consult on some key proposals for change.
Tackling economic crime and illicit finance remains a priority for this Government, to protect the UK economy and fight crime on a domestic and international level.
Alongside the review the Government have continued to deliver progress across their economic crime agenda, including the Economic Crime (Transparency and Enforcement) Act 2022, which introduces key reforms to beneficial ownership registers and enhances the unexplained wealth orders and sanctions regimes. On 15 June, HM Treasury also laid the Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022 before Parliament under the draft affirmative procedure. This legislation makes some time-sensitive updates to the Money Laundering Regulations, which are required to ensure that the UK continues to meet international standards, while also strengthening and ensuring clarity on how the UK’s anti-money laundering regime operates.
The review published on Friday proposes further areas of possible reform, most notably in how firms are supervised for anti-money laundering purposes where, despite progress since 2017, there is further to go to ensure that supervision is effective and consistent across all regulated firms. The review also commits to consult on some smaller changes to the regulations, where black-and-white inherited EU rules prevent the UK from taking a more risk-based approach to prevention. This includes looking at the enhanced due diligence required for domestic politically exposed persons. If the risks around domestic PEPs are found to be sufficiently low, the Government will consider changing the MLRs such that EDD and the additional requirements in Regulation 35 are not automatically required on domestic PEPs, but instead only triggered when there are other high-risk factors also present.
This review represents only part of the cross-cutting action that the Government are taking to progress the economic crime agenda, including the second public-private economic crime plan which is due to be published later this year and the upcoming Economic Crime and Corporate Transparency Bill, which will reform Companies House to further crack down on abuse of corporate structures.
The review is published on: https://www.gov.uk/government/publications/review-of-the-uks-amlcft-regulatory-and-supervisory-regime.
The post-implementation reviews will also be published alongside the regulations on Legislation.gov.uk.