Financial Crime World

Worldwide Anti-Money Laundering Laws Put into Place in United Kingdom

The United Kingdom has implemented a comprehensive anti-money laundering (AML) regime to combat money laundering and terrorist financing. This regime is outlined in various pieces of legislation, including the Proceeds of Crime Act 2002 (POCA), the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, and the Terrorism Act 2000.

Defining Money Laundering

The POCA 2002 defines money laundering as concealing, disguising, converting or transferring criminal property, or removing it from the UK. It also outlines several offences related to money laundering, including:

  • Failing to disclose knowledge or suspicion of money laundering
  • “Tipping off” others about investigations

Implementing AML Regulations

The UK government has introduced the Money Laundering Regulations 2017 to implement the EU’s Fourth Money Laundering Directive and align with the Financial Action Task Force’s standards. These regulations require businesses in certain sectors, including accountancy services, to:

  • Carry out customer due diligence
  • Report suspicious activity

Vulnerabilities and Risks

The UK’s National Risk Assessment of Money Laundering and Terrorist Financing 2020 highlights that accountancy services are particularly vulnerable to exploitation by criminals. The assessment notes that accountants may be unaware of the risks involved and do not implement adequate controls.

Flag It Up Campaign

To raise awareness about money laundering, the legal and accountancy sectors are working together with HM Government on the Flag It Up campaign. This campaign aims to:

  • Educate professionals about the warning signs of money laundering
  • Encourage them to report suspicious activity

Enforcing Financial Sanctions

The UK’s Office of Financial Sanctions Implementation (OFSI) is responsible for enforcing financial sanctions in the country. OFSI provides guidance on:

  • Who is subject to financial sanctions
  • How to apply for a licence
  • How to report breaches

Conclusion

Overall, the UK’s anti-money laundering regime is designed to prevent money laundering and terrorist financing by ensuring that businesses in certain sectors implement robust controls and report suspicious activity.

Key Points:

• The UK has implemented a comprehensive AML regime to combat money laundering and terrorist financing. • The POCA 2002 defines money laundering and outlines several related offences. • The Money Laundering Regulations 2017 require businesses to carry out customer due diligence and report suspicious activity. • Accountancy services are particularly vulnerable to exploitation by criminals. • The Flag It Up campaign aims to educate professionals about the warning signs of money laundering. • OFSI is responsible for enforcing financial sanctions in the country.