The state or country as a jurisdiction chosen for the analysing the anti-money laundering laws, rules and guidance is the UK. The regime adopted in the UK is based on the provisions of “the Terrorism Act of 2000, the Proceeds of Crime Act (POCA) of 2002, as well as the Money Laundering, Terrorist Financing, and Transfer of Funds Act of 2017”1. The state also follows the principles of AML summarized under the FATF principles through the official legal partnership. Furthermore, it is important to admit that because of Brexit, the UK was supposed to transpose its ML/FT practice standards to avoid the non-compliance penalties and risks, which are evaluated in a further discussion.
There are two main AML authorities currently operating and collaborating in the UK. The first is the Financial Conduct Authority (FCA) that was established back in 2012 as a regulating organization over financial services and operations performed by the primary finance-related organizations in the state. Apart from the overall financial safety monitoring, FCA is also empowered with investigating suspicious operation related to ML/TF, eventually engaging other law enforcers such as Crown Prosecution Services (CPS). FCA efforts in AML are supported by Her Majesty’s Revenue and Customs (HMRC), which is responsible for the formal issuance of operational guidance relevant to UK law base, transaction monitoring, and investigation of the due diligence aspects. Finally, legal enforcement of FCA and HMRC is supported by the NCA and Serious Fraud Office (SFO), which are empowered to arrest money launderers and seek for the court warrants and orders where applicable.
The first law that provides a background for AML operations in the UK is POCA, which clearly lists the offenses that fall under the money laundering definition. It suggests that all UK financial institutions are obliged to have internal systems that allow detecting laundering, including the transparent transaction monitoring and fraud reporting. The Terrorism Act refers to establishing policies and standards for counter financing of brute force activities that could be classified as terrorist attack, supporting previous requirements of POCA. The Money Laundering Regulations of 2017 and 2019 are mostly related to internal financial operations and aimed to provide additional control over the provide sector activities and encourage companies to supply the written risk assessments of ML/TF analysis on the organizational level2.
The overall compliance guidance proposed for the jurisdiction is to ensure that organizations take a risk-based approach to the faced threats. It means that companies are encouraged to engage in AML assessments related to both customers and business sectors to ensure that an adequate response to identified vulnerabilities is timely initiated. The recommended AML policy for UK companies comprises the following elements. First, all organizations are encouraged to have their own AML programs tailored per business specifics, where regulatory obligations, due diligence, and measures related to transaction monitoring are implemented.
These programs should also provide screening opportunities for media coverage, sanctions, and consider the aspect of politically exposed person (PEP). Second, companies should commit to reporting obligations of submitting notes or status updates related to suspicious activities to NCA when the risk of money laundering is identified. Third, all UK institutions are inquired to introduce the role of ML Reporting Officer responsible for overseeing the AML compliance principles based on the significant authority and knowledge proficiency. Finally, the ongoing training practices should be initiated for all staff engaged in ML/FT issues control to ensure that upcoming regulatory changes are anticipated.
Footnotes
- Comply Advantage (2020) Anti money laundering regulations in the UK. Web.
- Sanction Scanner (2020) Anti money laundering regulations in the United Kingdom (UK). Web.