The CIOT has responded to two Treasury consultations on the UK’s anti-money laundering (AML) regime, including proposed changes to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, SI 2017/692, which are likely to be introduced in spring 2022.
The CIOT’s suggestions and observations include the following:
a focus on having the correct paperwork in place can distract firms from more meaningful actions to address money laundering risk;
the provision of more detailed, real-time information by law enforcement authorities would help money laundering supervisors (including the CIOT) to act promptly and take action;
in some areas the rules are very prescriptive, while in others firms are left to take their own view on how to apply the risk-based approach. This makes it difficult to determine what actions they should take and, as a result, many firms appear to be doing more than is required;
the ability to view Suspicious Activity Reports (SARs) when undertaking AML visits would be useful, but supervisors should have discretion as to whether to look at the SARs of a particular firm. Specific legislation on this (including safeguards for supervisors) would be particularly helpful, together with clear guidance on the application of the legislation;
in relation to ‘proliferation financing risk assessments’, placing additional burdens on small firms should be avoided, particularly where those businesses are very unlikely ever to come across such risk;
there should be ongoing requirements to report discrepancies in the register of Persons with Significant Control to Companies House; and
making the principal Regulations clearer would reduce the need for guidance to interpret the legislation.
The CIOT has responded to two Treasury consultations on the UK’s anti-money laundering (AML) regime, including proposed changes to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, SI 2017/692, which are likely to be introduced in spring 2022.
The CIOT’s suggestions and observations include the following:
a focus on having the correct paperwork in place can distract firms from more meaningful actions to address money laundering risk;
the provision of more detailed, real-time information by law enforcement authorities would help money laundering supervisors (including the CIOT) to act promptly and take action;
in some areas the rules are very prescriptive, while in others firms are left to take their own view on how to apply the risk-based approach. This makes it difficult to determine what actions they should take and, as a result, many firms appear to be doing more than is required;
the ability to view Suspicious Activity Reports (SARs) when undertaking AML visits would be useful, but supervisors should have discretion as to whether to look at the SARs of a particular firm. Specific legislation on this (including safeguards for supervisors) would be particularly helpful, together with clear guidance on the application of the legislation;
in relation to ‘proliferation financing risk assessments’, placing additional burdens on small firms should be avoided, particularly where those businesses are very unlikely ever to come across such risk;
there should be ongoing requirements to report discrepancies in the register of Persons with Significant Control to Companies House; and
making the principal Regulations clearer would reduce the need for guidance to interpret the legislation.
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