Part 4: Upcoming changes to the UK’s anti-money laundering regime
In July 2021, HM Treasury launched a new AML consultation entitled ‘Amendments to the Money Laundering Terrorist Financing and Transfer of Funds Regulations 2017’. This consultation outlined ways in which the government intended to amend the UK’s money laundering regulations (MLRs) with several time-sensitive updates. The planned updates are required to ensure that the UK continues to meet international AML standards, whilst also clarifying how the UK’s anti-money laundering and counter-terrorist financing (AML/CTF) regime works.
The changes to the MLRs have been made through draft secondary legislation entitled ‘the Money Laundering and Terrorist Financing (Amendment) (No. 2) Regulations 2022’. Most of the measures in this SI will come into force on 1 September 2022, subject to parliamentary approval
In this series of blog posts, we take a closer look at what these changes will mean for anti-money laundering compliance.
Disclosure and Sharing
The government decided to amend Regulation 52 to:
- Expand the intelligence and information-sharing gateway to allow for reciprocal sharing from relevant authorities (specifically law enforcement) to supervisors
- Expand the list of ‘relevant authorities’ to explicitly include certain parts of BEIS, to support their functions under the MLRs, and
- Enable the FCA to disclose the confidential information it receives, in relation to its MLR duties, more widely.
These changes are expected to improve the objectives of the Economic Crime Act Plan to increase intelligence and information-sharing, particularly between the private and public sectors, and aim to provide more opportunities for a whole system approach to remove bad actors and those seeking to exploit the UK for criminal purposes.
Information gathering
The consultation explored and sought opinions on whether it would be beneficial to give the FCA additional powers of direction over Annex 1 firms to encourage a more consistent approach to information gathering across the FCA’s supervised population, and better inform its risk-based approach to supervision overall.
The government has decided to extend Regulations 74A-C to apply to Annex 1 firms in alignment with the current powers that the FCA has available for cryptoasset businesses under Regulations 74A-C of the MLRs.
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