On 21 April 2016, in response to the findings of the National Risk Assessment of Money Laundering/Terrorist Financing risks (NRA), HM Treasury published a call for information on the Anti-Money Laundering (AML) and Counter Terrorist Financing (CFT) supervisory regime, which closed to responses on 2 June 2016. HM Treasury sought the views of supervisors, regulated businesses, NGOs and the public focusing on the system of appointing supervisors, the powers of supervisors to incentivise compliance, adoption of the risk-based approach and how supervisors interact with supervised businesses.
Relevant parties’ views were sought on ten specific areas.
- Identification of risks, including the initial assessment of risk and monitoring and information sharing by supervisors;
- Supervisors’ accountability, including suggestions of formal evaluation mechanisms and an overarching body to direct AML/CTF strategy;
- Penalties and enforcement, including whether supervisors should all have harmonised penalties and powers and a harmonised approach for deciding penalties;
- Ensuring high standards in supervised populations, including whether supervisors should have the power to compel firms to provide detailed data reports and raising the training requirements;
- The role of professional bodies in AML/CFT supervision, including whether there should be separation between the advocacy and AML/CFT supervisory roles;
- Guidance, including whether there is a need for government approved guidance and the role government should play in approving guidance in the future;
- Transparency, including whether supervisors or the government should be required to publish enforcement cases, and whether supervisors should be required to carry out thematic reviews;
- Information sharing, including how best to facilitate information sharing and whether supervised businesses registers and membership of a supervisors membership body should be mandated;
- Ensuring the effectiveness of the FCA, including how to better implement the FCA’s risk based approach and focus on high risk businesses rather than blanket processes, and whether AML/CFT compliance failings pose a systemic risk to financial stability; and
- The number of supervisors, and more specifically whether the number of supervisors presents a barrier to effective and consistent supervision.
The responses to the consultation will inform the government’s policy strategy intended to address the issues raised by the NRA, ahead of the UK’s Mutual Evaluation by the FATF in 2017/2018.