The UK Anti-Money Laundering Action Plan was released with fanfare, heralding the biggest changes to the UK’s AML regime in a decade.
The plan is a straightforward document and sets out 19 actions across four ‘priority’ areas:
- A stronger partnership with the private sector
- Enhancing the law enforcement response
- Improving the effectiveness of the supervisory regime
- Increasing international reach.
Of key interest is the commitment to find more effective ways of working with the private sector. The plan is clear that this action underpins the other three priorities, recognising the role of the private sector as the first line of defence against money laundering and terrorist financing.
The report recognises what many in the industry have been thinking for some time: “Government has a duty to help them comply and is aware that the current regime does not work as well as it could and that more could be done to help businesses comply and better focus resources on serious crime”
The choice of language leaves no doubt that significant changes are planned “we need radically more information to be shared between law enforcement agencies, supervisors, and the private sector”. The success of the pilot Joint Money Laundering Intelligence Taskforce (JMLIT) is being built upon and the taskforce will now have a permanent footing. The pilot has already led to 11 arrests and a restraint of £558,144 of criminal funds; the Government are keen to expand the new taskforce to include more banks and financial sector firms.
A register will also be available to the new JMLIT which will contain the details of firms’ specialisms so that key stakeholders can contribute to the work of JMLIT when required.
Changes to Suspicious Activity Reports
Reporting of suspicious activity is key to any effective AML regime, and is one of the Financial Action Task Force’s Recommendations (recommendation 20). But the effectiveness of the UK’s Suspicious Activity Reporting (SAR) regime has long been brought into question. Whilst recognising the importance of sharing intelligence information with law enforcement, the timeliness of responses to consent requests is a headache for many Nominated Officers.
The news of plans to consider whether to remove the consent regime will no doubt be welcomed by some, the plan envisages the replacement to consent will be an intelligence-led approach and supported by JMLIT.
Rather than focusing on transactions, the reformed regime will concentrate on individuals and organisations of concern.
Reducing Regulatory Burden
It will be interesting to see how the Government will make good of their commitment to reduce regulatory burden on businesses. The “Cutting the Red Tape” review requested suggestions for areas of efficiency in the AML regime, with the implementation of the fourth EU Fourth Money Laundering Directive the UK government doesn’t have much leeway to radically reform the AML regime.
Prevention is better than cure?
A new approach of prevention is also being spearheaded in the action plan aiming to prevent both consumers and businesses from becoming involved in money laundering. Anti-drugs campaigns have received mixed results, will the anti-money laundering campaign be any different? I’m curious to see the approach taken in these campaigns and whether they will have an effect. I have no doubt that efforts to dissuade criminals who are driven by personal profit will be challenging.
Campaigns are also ongoing to raise professionals’ awareness of the risks of money laundering and how they can be mitigated. The UK national risk assessment of money laundering and terrorist financing discussed education “in order to reduce the risk of unwitting or negligent professional enablers”. Campaigns have already taken place in the legal sector and the Flag It Up! campaign is underway in the accountancy sector. With money laundering in the property market such a hot topic at the moment, is there a possibility we will be seeing awareness raising amongst estate agents next?
The AML industry is constantly facing new challenges, criminals make sure of that. With the international spotlight on areas affecting the industry likely to bring major reforms, and each jurisdiction looking to bring about their own ‘brand’ of AML, keeping up to date with latest developments can seem like a challenge for the most ardent AML professionals.
International Compliance Training have a range of courses, from foundation to advanced level which assist individuals and firms in understanding the requirements around all aspects of AML and beyond. If you are interested in how ICT can help you or your firm, please contact us.
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