Financial Crime World

UK’s Anti-Money Laundering Laws Toughen Grip on Financial Sector

The United Kingdom has strengthened its anti-money laundering (AML) regime by introducing new regulations and guidelines aimed at preventing financial crimes. The recent changes are designed to comply with international standards and keep pace with evolving threats.

Recent Changes

Money Laundering Regulations 2017

The UK’s Money Laundering Regulations 2017, implemented in June 2017, aimed to align the country’s AML regime with EU directives and Financial Action Task Force (FATF) recommendations. The regulations introduced significant changes, including:

  • Enhanced customer due diligence
  • Reporting requirements

Money Laundering and Terrorist Financing (Amendment) Regulations 2019

In January 2020, the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 came into force, implementing the EU Fifth Money Laundering Directive in the UK. The amendments:

  • Extended the scope of regulated sectors
  • Changed customer due diligence procedures
  • Introduced new reporting obligations to Companies House

The Proceeds of Crime Act 2002

According to the Proceeds of Crime Act 2002, as amended by subsequent legislation, individuals can commit a crime by:

  • Concealing or transferring criminal property
  • Entering into arrangements that facilitate the acquisition of such property

AML Guidance for Accountancy Sector

The UK’s AML guidance for the accountancy sector, published in May, provides detailed advice on preventing money laundering and countering terrorist financing. The guidance covers:

  • Risk assessment
  • Customer due diligence
  • Reporting requirements
  • Other essential measures

National Risk Assessment of Money Laundering and Terrorist Financing 2020

HM Treasury’s National Risk Assessment of Money Laundering and Terrorist Financing 2020 highlights the vulnerability of accountancy services to exploitation by criminals. The report identifies:

  • Company formation and termination as high-risk areas
  • Mainstream accounting and payroll services as vulnerable sectors

Combating Money Laundering

To combat money laundering, HM Government has launched the Flag It Up campaign, a joint initiative with the legal and accountancy sectors to raise awareness about warning signs of financial crimes. Accountants are encouraged to:

  • Review their risk assessments regularly
  • Implement appropriate controls to mitigate threats

Resources for Compliance

The National Crime Agency provides guidance on making Suspicious Activity Reports (SARs) and requesting Defence Against Money Laundering (DAML) permits. The Office of Financial Sanctions Implementation helps ensure compliance with financial sanctions, while the Home Office lists proscribed terrorist groups or organisations.

As the UK’s AML regime continues to evolve, accountants and financial institutions must stay vigilant against money laundering threats.