31/10/2017

Information to help organisations guard against illegal financing (UK)

A new report examining how criminals attempt to move illicit funds through the UK has drawn on the lessons learnt from government actions in recent years to create a comprehensive risk assessment that can be used by government, law enforcement and the private sector to strengthen their protections against illegal financing.

By building on the first national risk assessment conducted in 2015, ‘National risk assessment of money laundering and terrorist financing 2017’ has been able to identify trends and advise on the services or products criminals are currently exploiting so organisations and law enforcement can focus their efforts on tackling the most significant threats.

Key findings of the 2017 national risk assessment include

• while new types of money laundering such as exploitation of capital markets and technology continue to emerge, they appear to be less prevalent than high-end and cash-based money laundering
• the distinctions between the different types of money laundering are becoming increasingly blurred
• cash, alongside cash intensive sectors, remains the favoured method for terrorists to move funds through and out of the UK
• banks, professional and financial services are also crucial gateways for criminals looking to disguise the origin of their funds
• a wide-ranging set of reforms by government and law enforcement bodies over recent years is still in its early days, but starting to take effect

Separate chapters in the 2017 National Risk Assessment illustrate the scope of the money laundering problem by covering sectors ranging from accountancy, legal and estate agency services, through trusts and corporate structures to money services businesses, non-profit organisations, gambling and high-value dealers.

The report also covers the legal, regulatory and law enforcement frameworks that have been established to tackle money laundering and terrorism finance, focusing in particular on developments since the first NRA in 2015.

The most recent and current developments include

• ‘The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017’
• A new watchdog termed the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), which is being formed within the Financial Conduct Authority to ensure money handling businesses benefit from more consistent supervision than is currently available from 22 separate bodies (ref ‘Anti-money laundering supervisory regime’).
• ‘Sanctions and Anti-Money Laundering Bill’ – which is currently going through parliament – contains new powers to enable the UK to fulfil its international obligations and impose further sanctions domestically post-Brexit.
• ‘Criminal Finances Act 2017’ extends the scope of information that can be required on a ‘suspicious activity report’ (SAR).
• Asset Recovery Action Plan 2017, which was announced last year and will be published later this year, will set out the government’s ambition to improve the performance of the current asset recovery regime.

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