The Home Office has today published its action plan for the reform of the UK’s AML and CTF regime and included within the plan are some radical proposals for an overhaul of the current legal and regulatory framework. Key amongst these for those operating within the regulated sector is a consultation on major changes to the POCA SAR regime, including removing some requirements to report altogether and a focus on the highest risk entities.
The consultation will consider:
- Removal of the SARs consent regime
- New powers for law enforcement agencies to require reporters to take actions in relation to their customers, and to request further information on SARs
- Data sharing between private sector organisations to tackle money laundering and terrorist financing
- The creation of a new power to require individuals to declare their sources of wealth
- The creation of a linked power to seek forfeiture of assets if they fail to declare their sources of wealth
- The creation of an illicit enrichment offence
- A power to designate an entity as being of money laundering concern
- Development of a new power to allow money held in bank accounts to be swiftly seized and forfeited
- Changes to the civil recovery powers to allow administrative seizure up to £100,000.
Some of the proposals are based upon existing AML requirements in the US, including various parts of the USA PATRIOT Act, which permit US regulators to designate entities of ‘primary money laundering concern’ and data sharing between private sector organisations.
Zia Ullah, Partner and head of financial crime at Eversheds says:
“Today’s publication of the UK government’s proposals for change to the AML/CTF regime demonstrates that regulators and law enforcement agencies have listened to the concerns of the private sector, particularly around the POCA consent regime. However, in the midst of some welcome consideration of an overhaul to the current AML/CTF regime, lay a multitude of potentially new compliance obligations for regulated businesses and powers for law enforcement”
Neill Blundell, Partner and Global head of Fraud and Investigations at Eversheds says:
“It will be vital to properly examine any proposed legislation that provides law enforcement with administrative powers that allow the seizure of property and assets without the inherent checks and balances built into the existing framework”