Treasury and the Home Office have published the government’s action plan to stop money laundering and the funding of terrorism. The document outlines:

  • actions the government will introduce to stop money laundering;
  • when the actions are due to be completed;
  • what the government has done so far; and
  • how the government will implement the action plan.

The action plan is principally concerned with three priorities: needing a more robust law enforcement response to the threats faced; reforming the supervisory regime and ensuring that those few companies who facilitate or enable money laundering are brought to task; and increasing Treasury’s international reach to tackle money laundering and terrorist financing threats by working with international groups, such as the G20 and FATF, to take action overseas. Treasury hopes to underpin these priorities with an increased level of information sharing and cooperation between law enforcement agencies, supervisors and the private sector. As part of the action plan, the government is seeking views on potential changes to legislation and options to reform the AML/CFT regime. Part of the paper comprises the findings from the call for information on the suspicious activity reports (SARs) regime. The key themes emerging from the consultation included:

  • respondents’ belief that the current regime is ineffective and desire to see it used in a more purposeful manner that will lead to clear operational outcomes, such as arrests and asset recovery;
  • highlighting the need for a better information sharing model to support greater collaboration between law enforcement agencies, regulators and the private sector;
  • concerns in the reporting sector regarding the phrasing of the requirement to report suspicious transactions, as set out in the Proceeds of Crime Act 2002 (POCA). This concern, and the penalties for failure to report, drive a significant level of defensive reporting, where reports are made more because of concerns regarding a failure to comply with POCA than because of genuine suspicion;
  • respondents seeking clarification of the “tipping off” offence. Reporters are concerned that any sharing of information, even to assist in preventing or detecting crime, could be an offence;
  • all sectors viewed the technical infrastructure and the resources of the UK Financial Intelligence Unit that supports the regime as inadequate and so wanted the unit’s capabilities upgraded; and
  • the consent regime being seen by many as problematic. Respondents said it causes delays, difficulties with customers and is incompatible with some businesses.

Among the planned actions are a complete reform of the SARs regime to be completed by October 2018. The government has already set up the Joint Money Laundering Intelligence Taskforce (JMLIT) as a pilot scheme and believes it has already been a success. It will now have a permanent footing. The government will create a register of banks’ particular business specialisms to which the JMLIT will have access so it can address as many relevant money laundering typologies as possible. The government will also work on changing legislation to improve information sharing between law enforcement agencies and the private sector. It will work to improve intelligence collection capability and explore new powers to tackle money laundering. The review of the supervisory regime is also due to report in the autumn. The consultation seeks views on many aspects of the proposed changes including on the potential risks of removing the current consent regime. (Source: Treasury publishes AML/CFT action plan)