Financial Crime Risk Management

National Crime Agency

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HM Revenue & Customs

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HM Treasury

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General

HM Treasury is the UK government’s economic and finance ministry, maintaining control over public spending, setting the direction of the UK’s economic policy and working to achieve strong and sustainable economic growth. Its responsibilities include financial services policy: including banking and financial services regulation.

In March 2016 the UK launched the Office of Financial Sanctions Implementation (‘OFSI’) to replace the Asset Freezing Unit of HM Treasury.

• Home Page
• HMT annual report and accounts
• Anti-money laundering and counter terrorist finance supervision reports
• Operation of the UK's counter-terrorist asset freezing regime: quarterly report to Parliament

Guidance

• Money laundering and terrorist financing controls in overseas jurisdictions – advisory notice

Office of Financial Sanctions Implementation

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General

• Home Page
• News and communications
• See all latest documents

Guidance

• Guidance and regulation
• Counter financing of terrorism, general licenses
• Who is subject to financial sanctions in the UK?
• Financial sanctions targets by regime
• Financial Sanctions, UK freezing orders
• Annual frozen asset review and reporting form
• Enforcement of financial sanctions
• List of designated persons, terrorism and terrorist financing
• Monetary penalties for breaches of financial sanctions
• Proscribed terrorist groups or organisations

Serious Fraud Office

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General

• Home Page
• Latest News
• News Releases
• Case Updates
• Deferred Prosecution Agreements
• Speeches
• Strategic and Business plans

Guidance

• Bribery Act guidance
• Corporate self-reporting
• Operational Handbook
• Information for Whistle-blowers
• Joint Prosecution Guidance of the Director of the SFO and the Director of Public Prosecutions on the Bribery Act 2010
• Ministry of Justice guidance on The Bribery Act 2010

Law Societies

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Accountancy Bodies

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Consultative Committee of Accountancy Bodies

CCAB publishes guidance for UK providers of audit, accountancy, tax advisory, insolvency, or trust and company services.

• CCAB case studies - October 2016.
• AML guidance for the accountancy sector – March 2018.
• Supplementary AML guidance for tax practitioners – July 2019.
• Supplementary AML for insolvency practitioners (Draft - Pending approval from HM Treasury) – October 2019.

ICAEW

The Institute of Chartered Accountants in England and Wales is the AML supervisor to nearly 11,000 firms. AML reference points include:

• UK law and guidance on anti-money laundering.
• Search query ‘Money laundering’ on ICAEW website.
• ICAEW Code of Ethics.

ACCA

The Association of Chartered Certified Accountants is a recognised professional body. AML reference points include:

• Practitioner resources.
• Regulation, data protection and cyber security.
• Specimen policies and procedures.
• Guidance for the Accountancy Sector (based on law and regulation at 26 June 2017).

ICAS

The Institute of Chartered Accountants of Scotland (ICAS) is a professional body and regulator. AML reference points include:

• News.
• Awareness - Red flags.
• Resources.

Gambling Commission

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The Gambling Commission ensures controls are in place to prevent casinos from being used for money laundering or terrorist funding.

• Public Register of licence holders and licensed premises.
• AML news for gambling businesses.
• The risk-based approach to preventing money laundering.
• Duties and responsibilities under the Proceeds of Crime Act 2002.
• Enforcement action (AML) search.
• How to meet your AML responsibilities.
• Regulatory action for AML failings reported in news pages.
• Key findings from AML compliance work.
• Casinos: Prevention of money laundering.
• AML/CTF Guidance for remote and non-remote casinos (Fifth edition – January 2020).
• List of recent regulatory sanctions imposed on licence holders.
• List of recent regulatory sanctions imposed on personal licence holders.

Joint Money Laundering Steering Group

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The JMLSG is made up of the leading UK Trade Associations in the Financial Services Industry. Its aim is to promulgate good practice in countering money laundering and to give practical assistance in interpreting UK Money Laundering Regulations - primarily via publication of industry guidance.

When considering whether to take disciplinary action against an FCA-regulated firm in respect of a breach of the relevant provisions of SYSC, the FCA will have regard to whether a firm has followed relevant provisions in JMLSG guidance (see: FCG 3.1.8).

Hyperlinks below launch the JMLSG website in a new window:

• JMLSG Home Page
• Latest News
• Frequently asked questions
• Consultation text of relevant material within Parts I, II and III, with proposed amendments

Guidance:

• Current JMLSG Guidance
• Previous Guidance

UK Law & Regulation

Selecting hyperlinked legislation will launch the UK Government website source in a new window.

Notes

1. References to commencement of legislation might relate to early provisions entering into force, with other provisions following at a later date.
2. Legislation may have since been subject to amendment. This summary is not a complete chronology of applicable law.
3. Legislation listed is generally applicable to England, Wales and Northern Ireland. Some elements may also apply to Scotland (or be reflected in local Scottish law), but differences may exist – For clarification on any aspect of law, we suggest you contact an appropriate legal professional for advice.
4. A list of financial restrictions in force in the UK is maintained by the OFSI. Financial sanction in the UK are governed by various pieces of legislation (e.g. Terrorist Asset-Freezing etc. Act 2010). The list below does not cover all financial sanctions legislation. To research where ‘sanctions’ appears in the title of Primary and Secondary Legislation – Click ’Sanctions’

2019

The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 - Entered into force on 10 January 2020. Introduced amendments to The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, reflecting requirements of the European Union’s Fifth Money Laundering Directive, (EU) 2018/843 (‘5MLD’). Extended the scope of the regulated sector, made changes to customer due diligence and enhanced due diligence (including a new requirement to report details to Companies House in relation to discrepancy identified between information collected during customer due diligence and information on the Persons with Significant Control register (See also ‘5MLD – FAQ’).

2018

The Sanctions and Anti-Money Laundering Act 2018 (‘SAMLA’) - Some provisions entered into force on 23 May 2018. The Act reduces the risk of the UK breaching international financial sanctions obligations following its withdrawal from the European Union:

• As a member of the United Nations, the UK is required to implement sanctions included in resolutions passed by the UN Security Council, which are implemented via EU Regulation and have direct legal effect in all EU member states.
• The UK currently adopts EU sanctions and also implements specific sanctions of its own (primarily targeted at terrorism and related activities):
• The UK left the European Union on 31 January 2020 - The Withdrawal Agreement between the EU and the UK includes a ‘transition period’, which will end on 31 December 2020.
• During the transition period, the UK will continue to be bound by EU sanctions. UN and EU sanctions will continue to be implemented in the UK through EU law during this time.
• The Act allows the UK to lift expired sanctions after the transition period has ended, if necessary, to align with its obligations as a UN member.
• The Act also provides UK government with new powers to operate a UK sanctions regime.

SAMLA also includes further provisions in relation to:

• The detection, investigation and prevention of money laundering and terrorist financing;
• Implementing Financial Action Task Force (‘FATF’) standards intended to maintain integrity of the international financial system;
• Requiring the Secretary of State to publish reports on progress made towards putting in place a register of beneficial owners of overseas entities; and
• Defining meanings of: “funds”, “economic resources” and “freeze” (sec.60); and “financial services” and “financial products” (sec.61).

2017

The Criminal Finances Act 2017 - Entered into force in January 2018. Amended the Proceeds of Crime Act 2002. Made provisions in connection with terrorist property; created corporate offences for cases where a person associated with a body corporate or partnership facilitates the commission by another person of a tax evasion offence.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 - Entered into force on 26 June 2017. Transposed much of the European Union’s Fourth Money Laundering Directive, (EU) 2015/849 (‘4MLD’) into UK law.

2015

The Serious Crime Act 2015 - Entered into force in May 2015. Its provisions include amending the Proceeds of Crime Act 2002, by providing an exemption from civil liability for money-laundering disclosures (i.e. Where an authorised disclosure is made in good faith, no civil liability arises in respect of the disclosure on the part of the person by or on whose behalf it is made.)

2013

The Crime and Courts Act 2013 - Established the National Crime Agency (‘NCA’) to replace the Serious Organised Crime Agency (‘SOCA’). The NCA also absorbed national Financial Intelligence Unit (‘FIU’) responsibilities from SOCA relating to money laundering and terrorist financing.

2010

The Bribery Act 2010 - Entered into force on 1 July 2011:

• Contains two general offences covering the offering, promising or giving of a bribe (active bribery) and the requesting, agreeing to receive or accepting of a bribe (passive bribery)
• Created an offence relating to bribery of a foreign public official in order to obtain or retain business or an advantage in the conduct of business.
• Created the corporate liability offence for failing to prevent bribery on behalf of a commercial organisation.
• Also enables a commercial organisation to have a full defence if it can show that despite a particular case of bribery it nevertheless had adequate procedures in place to prevent persons associated with it from bribing.

The Terrorist Asset-Freezing etc. Act 2010 (‘TAFA 2010’) - Entered into force on 16 December 2010:

• Provided HM Treasury with powers to freeze the funds and economic resources of those suspected or believed to be involved in terrorist activities.
• Restricts the making available of funds, financial services and economic resources to, or for the benefit of such persons.
• Persons designated under TAFA 2010 or Council Regulation (EC) No 2580/2001 (i.e. specific restrictive measures directed against certain persons and entities with a view to combating terrorism, dated 27 December 2001) are subject to an asset freeze. Financial services cannot be made available to or for their benefit (i.e. includes insurance and banking services).

2008

The Counter-Terrorism Act 2008 - Entered into force on 26 November 2008. Part 5 (Terrorist financing and money laundering) introduced Schedule 7, which:

• Addressed the risks from money laundering, terrorist financing and the proliferation of nuclear, radiological, biological or chemical weapons.
• Empowered HM Treasury to issue directions to firms in the financial sector including Money Services Businesses (‘MSBs’).
• Required MSBs in the regulated sector to comply with directions issued by HM Treasury.
• Appointed HMRC as an enforcement authority to supervise MSBs, to ensure their compliance with the requirements imposed by any direction.

A direction will contain specific legal requirements imposed by HMT on businesses in the financial sector in relation to their transactions or business with:

• a person carrying on business in a country;
• the government of a country;
• a person resident or incorporated in a country.

2007

The Terrorism Act 2000 and Proceeds of Crime Act 2002 (Amendment) Regulations 2007 - Entered into force on 26 December 2007. Implemented, in part, the Third Money Laundering Directive, 2005/60/EC, on preventing use of the financial system for the purpose of money laundering and terrorist financing (‘3MLD’). The regulations updated the Terrorism Act 2000 and the Proceeds of Crime Act 2002.

The Money Laundering Regulations 2007 - Entered into force on 15 December 2007, replacing the Money Laundering Regulations 2003.

The Terrorism Act 2000 (Business in the Regulated Sector and Supervisory Authorities) Order 2007 - Entered into force on 15th December 2007. Amended the meaning of a business in the regulated sector and the meaning of a supervisory authority for the purposes of Part 3 of the Terrorism Act 2000 (terrorist property) by substituting new Parts 1 and 2 of Schedule 3A to that Act. Implemented other parts of 3MLD into UK law.

Proceeds of Crime Act 2002 (Business in the Regulated Sector and Supervisory Authorities) Order 2007 - Entered into force on 15th December 2007. Amended the meaning of a business in the regulated sector and the meaning of a supervisory authority for the purposes of Part 3 of the Terrorism Act 2000 (terrorist property) by substituting new Parts 1 and 2 of Schedule 3A to that Act. Implemented other parts of 3MLD into UK law.

2006

The Terrorism Act 2006 - Made provision for and about offences relating to conduct carried out, or capable of being carried out, for purposes connected with terrorism; to amend enactments relating to terrorism; to amend the Intelligence Services Act 1994 and the Regulation of Investigatory Powers Act 2000; and for connected purposes.

The Fraud Act 2006 - Entered into force on 15 January 2007. Introduced new criminal offences linked to fraud and repealed the following offences:

Theft Act 1968

• Section15 (obtaining property by deception).
• Section15A (obtaining a money transfer by deception).
• Section 16 (obtaining a pecuniary advantage by deception).
• Section 20(2) (procuring the execution of a valuable security by deception).
• Reference to "cheat" in Section 25 (going equipped).

Theft Act 1978

• Section 1 (obtaining services by deception).
• Section 2 (evasion of liability by deception).

2005

The Serious Organised Crime and Police Act 2005 - Established the Serious Organised Crime Agency (‘SOCA’) and made provision about investigations, prosecutions, offenders and witnesses in criminal proceedings and the protection of persons involved in investigations or proceedings; to provide for the implementation of certain international obligations relating to criminal matters; to amend the Proceeds of Crime Act 2002; to make further provision for combatting crime and disorder, including new provision about powers of arrest and search warrants and about parental compensation orders; to make further provision about the police and policing and persons supporting the police; to make provision for protecting certain organisations from interference with their activities; to make provision about criminal records; to provide for the Private Security Industry Act 2001 to extend to Scotland; and for connected purposes.

2003

The Money Laundering Regulations 2003 - Entered into force on 1st March 2004, replacing the Money Laundering Regulations 1993 and 2001 with updated provisions which reflect Directive 2001/97/EC of the European Parliament and of the Council amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering.

The Proceeds of Crime Act 2002 (Business in the Regulated Sector and Supervisory Authorities) Order 2003 - Entered into force on 1st March 2004. Amended the meaning of a business in the regulated sector in Part 1 of Schedule 9 to the Proceeds of Crime Act 2002, to take into account Directive 2001/97/EC of the European Parliament and of the Council amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering. The Order also: (i) Added two bodies to the list of supervisory authorities in Part 2 of that Schedule; and (ii) Completed the UK’s implementation of the 2nd EC Money Laundering Directive (‘2MLD’).

The Terrorism Act 2000 (Business in the Regulated Sector and Supervisory Authorities) Order 2003 - Entered into force on 1st March 2004. Amended the meaning of a business in the regulated sector in Part 1 of Schedule 3A to the Terrorism Act 2000. The Order also: (i) Added two bodies to the list of supervisory authorities in Part 2 of that Schedule; and (ii) Completed the UK’s implementation of the 2nd EC Money Laundering Directive (‘2MLD’).

2002

Proceeds of Crime Act 2002 (‘POCA’) - Established the Assets Recovery Agency to disrupt organised criminal enterprises by recovering criminal assets, and promoting financial investigation as a part of criminal investigation (The Agency subsequently ceased to exist from April 2008). POCA provisions also included confiscation and restraint to recover property obtained through unlawful conduct or intended to be used in unlawful conduct. Part 7 (Money Laundering) defines:

• Money laundering offences
• Consent
• Disclosures

2001

The Anti-terrorism, Crime and Security Act 2001 - Amended the Terrorism Act 2000; included provisions on terrorism and security, freezing assets, amended or extended criminal law and powers for preventing crime and enforcing that law.

The Money Laundering Regulations 2001 - Entered into force on 12th November 2001, amending The Money Laundering Regulations 1993, to also cover money service businesses and money service operators).

2000

The Terrorism Act 2000 - Entered into force on 20 July 2000 (later amended by the Anti-terrorism, Crime and Security Act 2001 and the Terrorism Act 2006). The legislation includes:

• Sec. 18 introduced a money laundering offence linked to facilitating retention or control by or on behalf of another person of terrorist property.
• The Home Secretary may proscribe an organisation or group if he believes it is concerned in terrorism, and it is proportionate to do.

1993

The Money Laundering Regulations 1993 - Entered into force on 1 April 1994. Introduced to implement the European Union’s 1991 Money Laundering Directive, focused specifically on the financial sector.

International Bodies

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Basel Committee on Banking Supervision (‘BCBS’)

The BCBS is a global standard setter for prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters. Its members comprise central banks and bank supervisors.

• The Basel Committee - overview
• Search term ‘laundering’ on BCBS website

Egmont Group

The Egmont Group is a body of 164 Financial Intelligence Units (FIUs). Most of the Egmont Group’s operations and information is restricted to the inter-country network of national FIUs, but some limited information is available to the public.

• Egmont Group – Home Page
• Document Library
• Members List

European Banking Authority (‘EBA’)

The EBA is an agency of the European Union set up to achieve a more integrated approach to banking supervision across the EU. Among its core tasks is the establishment of a single set of rules applicable to all banking institutions in the EU in the same manner, which is the basis for the creation of an EU single market in the banking sector. The EBA also seeks to ensure that these common rules are all understood and applied by banking supervisors across the EU in a consistent and harmonised way. Its work aims at upgrading the quality and consistency of supervision across the EU, as well as at strengthening oversight of cross-border groups, i.e. those banking groups which operate in more than one EU Member State.

• Anti-Money Laundering and Countering the Financing of Terrorism
• Guidelines on risk based supervision
• Guidelines on risk factors and simplified and enhanced customer due diligence
• Guidelines to prevent the abuse of fund transfers for ML/TF purposes
• Information on administrative sanctions
• Joint Committee Guidelines on cooperation and information exchange for AML/CFT supervision purposes
• Regulatory Technical Standards on Central Contact Point to strengthen fight against financial crime
• Regulatory Technical Standards on the implementation of group wide AML/CFT policies in third countries
• Revised Guidelines on ML/TF risk factors

European Commission

The European Commission carries out risk assessments in order to identify and respond to risks affecting the EU internal market. It promotes the adoption of global solutions to respond to these threats at international level. The European Union adopted robust legislation to fight against money laundering and terrorist financing which contributes to those international efforts. The Commission ensures effective application of this legislation by reviewing transposition of EU acquis and working with networks of competent authorities.

• Anti-money laundering and counter terrorist financing
• Latest developments
• EU context
• International context
• Documents
• List of high-risk third countries with strategic deficiencies
• Revised EU methodology for the identification of high-risk third countries

European Union

The European Union adopted the first anti-money laundering Directive in 1990 in order to prevent the misuse of the financial system for the purpose of money laundering. The Directive required obliged entities to apply customer due diligence (‘CDD’) requirements when entering into a business relationship (i.e. to identify and verify the identity of clients, monitor transactions and to report suspicious transactions). The legislation has since evolved and been revised to mitigate risks relating to money laundering and terrorist financing.

• 6th Money Laundering Directive - Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law
• 5th Money Laundering Directive - Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (Text with EEA relevance)
• 4th Money Laundering Directive - Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (Text with EEA relevance)
• 3rd Money Laundering Directive - Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (Text with EEA relevance)
• 2nd Money Laundering Directive - Directive 2001/97/EC of the European Parliament and of the Council of 4 December 2001 amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering
• 1st Money Laundering Directive - Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering

Financial Action Task Force (‘FATF’)

The FATF is the global money laundering and terrorist financing watchdog. The FATF issues Recommendations (or Standards), to encourage a co-ordinated global response to preventing organised crime, corruption and terrorism, and monitors countries implementation of FATF Standards.

• FATF – Home Page
• FATF Recommendations
• Mutual Evaluations
• High-risk and other monitored jurisdictions
• Methods and Trends
• Financing of Proliferation
• Corruption
• Financial Inclusion
• Guidance on Digital ID
• All Publications

Financial Stability Board (‘FSB’)

The FSB is an international body that monitors and makes recommendations about the global financial system.

• FSB – Home Page
• Search term ‘laundering’ on FSB website
• Ease of Doing Business rankings
• Monitoring by Jurisdiction

Transparency International (‘TI’)

Transparency International operates via chapters in more than 100 countries with an international secretariat in Berlin, to lead the fight against corruption.

• TI – Home Page
• Corruption Perceptions Index 2019 (published January 2020)
• Global Corruption Barometer 2019
• National integrity system assessments
• TI Publications

World Bank

The World Bank provides a wide array of financial products and technical assistance, and helps countries share and apply innovative knowledge and solutions to the challenges they face.

• World Bank – Home Page
• Search term ‘laundering’ on World Bank website
• Financial Integrity links