Money Laundering Reforms
Following a recent overhaul published by the Home office and HM Treasury in an “Action plan for anti-money laundering and counter-terrorist finance”, the Government look set to reform the current Suspicious Activity Reports (SAR’s) with proposals to include the scrapping of the existing statutory money laundering defence and the existing consent regime. These proposals are aimed at the regulated sector and to focus the anti-money laundering efforts “on the highest risks, without troubling low risk clients”.
Under a recent home office review, during 2014-2015, some 381,882 reports were received with the majority of them being from retail banks. The review found that too many resources in both the public and private sectors were devoted to “relatively low-risk transactions”. With Serious and Organised Crime costing the UK at least £24Billion, the reforms are said to make “the UK a more hostile place” for criminals. Professional organisations, such as Lawyers, will also need to have a highlighted the role in enabling “the laundering of the proceeds of UK and overseas crime into, through and out of the UK”.
A ‘call for information’ in 2015 on SAR’s highlighted the concerns about POCA’s reporting requirement. Respondents considered the consent regime was “problematic”, and caused “delays and difficulties with customers”. The SAR’s regime would focus on the highest-risk entities “rather than targeting transactions”, however reporters would still need to provide reports when they had suspicion. The plan would enable reporters to “work with the National Crime Agency (NCA)…..and other law enforcement agencies”. This would allow sharing of information and provide better SAR’s, where there are strong suspicions of criminal activity, through “new information sharing legal gateways”.
A written statement from the Home Secretary, Theresa May, said the reforms would “make better use of public and private sector resources against the highest threats, target the entities that carry out money laundering instead of individual transactions, and provide the NCA with a suite of new powers, including one to oblige SARs reporters to provide additional information when requested”.
By Jason Green - Senior Negotiator