Anti-Money Laundering: under review

1 September 2015

The Government’s latest step in its Cutting Red Tape review programme focuses on the regime to prevent money laundering and terrorist financing.  Louise Hodges looks at the review and how preparations for the Fourth Money Laundering Directive are to be set in train.

Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (‘4th AML directive’) entered into force on the 26th June 2015.  The UK will now bring this into domestic law through updated money laundering regulations by June 2017.

As the next swathe of regulations is prepared, the Government is on the lookout for ways to improve the efficiency and effectiveness of the anti-money laundering regime.  Whilst there may be limited room for manoeuvre in incorporating the EU-level rules, the Review does ask for feedback on how implementation of the regime in practice might be improved. 

Businesses are encouraged to submit evidence of over-complicated and ineffective requirements.  Issues already highlighted include the view that current guidance, rules and proof of identity requirements can be unnecessarily cumbersome and complicated. 

The Review specifically asks for evidence on the role of supervisors - including the Financial Conduct Authority and HM Revenue and Customs – and where the activity of these regulators could be made more efficient and effective.  It seeks views on the effectiveness and proportionality of supervisors’ approach to supervision and enforcement and whether this is proportionate, or not, to the risks posed.

Further questions asked include:

  • Does current guidance meet business needs?
  • Are there any aspects of regulatory activity that could be made more efficient? 
  • What is the impact on banks, financial institutions and other businesses that are affected directly by the regime?
  • What is the impact on businesses who are under a duty to comply with the anti-money laundering requirements of those banks and financial and other businesses? 

The call for evidence will run for eight weeks until 23 October 2015.

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