Risk Assessment Identifies Money Laundering, Terrorist Financing, and Proliferation Financing Risks for Businesses
A comprehensive risk assessment has identified significant risks of money laundering, terrorist financing, and proliferation financing for businesses operating in the financial sector. In response, these companies must establish and maintain policies, controls, and procedures to mitigate and manage effectively the identified risks.
Regulatory Measures Imposed on Non-Compliant Firms
- Regulatory authorities may impose civil measures on firms found non-compliant with anti-money laundering regulations, including:
- Removing “fit and proper” status from individuals
- Suspending or cancelling business registration
- Making public statements censuring businesses
- Issuing temporary or permanent prohibitions on management roles
Criminal Sanctions for Money Laundering Offences
- Both the Proceeds of Crime Act (POCA) and anti-money laundering regulations contain criminal offences related to money laundering activity.
- These offences apply to:
- Individuals
- Corporations
- Corporate officers who consented or connived in the offence
Process for Assessment and Collection of Sanctions
- Relevant supervisory authorities will follow their guidance and processes for assessing and collecting sanctions, as well as appealing administrative decisions.
- Decisions may be appealed to:
- The High Court
- Upper Tribunal
- Regulatory bodies will typically publish their decisions unless there is a valid reason not to do so.
Anti-Money Laundering Requirements for Financial Institutions
Financial institutions and other designated businesses subject to anti-money laundering requirements include:
- Credit institutions
- Financial institutions
- Auditors
- Insolvency practitioners
- External accountants
- Tax advisers
- Independent legal professionals
- Trust or company service providers
- Estate agents
- High-value dealers
- Casinos
- Art market participants
- Crypto-asset exchange providers
- Custodian wallet providers
These entities must:
- Conduct risk assessments
- Implement appropriate policies and procedures
- Know their customers to comply with regulations.
Additional Obligations for Financial Institutions
Financial institutions must also:
- Address guidance given by regulatory bodies
- Ensure that directors and senior managers have practical responsibility for organizing and controlling the firm’s affairs in accordance with relevant principles.
Payments and Money Transmission Activities Subject to Anti-Money Laundering Requirements
Money services businesses (MSBs) engaged in payments or money transmission activities are subject to anti-money laundering requirements, including:
- Registration with HMRC and/or the Financial Conduct Authority (FCA)
- Certain exceptions may apply, depending on the specific circumstances of each business.