On 21 April 2016, the UK Government published its Action Plan for anti-money laundering (AML) and counter-terrorist financing (CTF), which identified and proposed the steps to address weaknesses revealed by the National Risk Assessment (NRA) of Money Laundering and Terrorist Financing of October 2015. The NRA assessed the relevant risks and focused on three priorities: a more robust law enforcement response, reforming the supervisory regime and increasing the UK's international reach. The importance of building a new and powerful partnership with the private sector was also highlighted by the NRA, in order to improve suspicious activity reporting, deliver deeper information-sharing and enable the relentless disruption of criminals and terrorists. The Government ran a consultation from April to June 2016 and received 52 responses. The consultation did not cover the supervisory regime, as that was subject to a separate consultation by HM Treasury.
On 13 October 2016, the Home Office published its response to the above consultation regarding the reform of the AML/CTF regime. The response makes various proposals, the most important of which are summarised below:
1. Initiation of a Suspicious Activity Reports (SARs) reform program, including IT and process improvements and introducing immediate legislative changes to:
allocate the power to the National Crime Agency to obtain further information from a regulated business following receipt of a SAR, following a recommendation from the FAFT; and
extend the investigative period where senior officers from law enforcement agencies can prevent a transaction from going ahead, while they gather evidence needed for a law enforcement
intervention. The Criminal Finances Bill 2016 will amend the Proceeds of Crime Act 2002 (POCA) to extend the moratorium period by a court, at the request of the senior officer, for periods of up to 31 days, up to a total of 186 days.
2. Introduction of Unexplained Wealth Orders (UWO) requiring an individual to explain the origin of assets that appear to be disproportionate to known income. An UWO would be made by the court and in a case where the respondent refuses to comply without providing an explanation, the court can presume that the property in question is "recoverable property" under the existing civil recovery powers in POCA. The UWO will be subject to the relevant property being aggregated to a minimum value threshold and there being reasonable grounds to suspect that known income is insufficient to obtain the property. The UWO will be available either against any person that law enforcement agencies have reasonable grounds to suspect has links to serious crime, or WWagainst overseas politically exposed persons.
3. Establishment of a new information sharing gateway introduced through the Criminal Finances Bill for the exchange of data on suspicion of terrorist financing and money laundering between private sector firms with immunity from civil liability. Firms in the regulated sector will be able to share information on suspicions on money laundering and terrorist financing with one another, under the legal `safe harbour' of immunity from criminal or civil liability. The new powers will also enable the submission of joint SARs, so that firms can provide the whole picture of a money laundering scheme that crosses multiple firms, rather than submitting individual pieces of the jigsaw to the UK Financial Intelligence Unit.
4. Introduction of new powers to enable the more effective seizure and forfeiture of criminal proceeds held in bank accounts without the need to secure a conviction. Concern has been expressed that the existing civil recovery powers are too narrow and the 10,000 de minimus threshold is too high.
5. Power to enable the seizure and forfeiture of portable high value items used to store and move the proceeds of crime.
The Government has decided to remove the consent regime, but will keep the issue under review while the SARs reform programme develops. The Government also decided against the introduction of an illicit enrichment offence.