Meet the New Rule-Makers
At the end of 2017, the Government announced its strategy to fight financial crime in the UK and internationally. In a bid to cement the UK's position as an international financial centre – potentially under threat in the wake of Brexit – Theresa May appointed MP John Penrose as the anti-corruption champion to oversee the new measures. The strategy is intended to strengthen the UK's financial integrity internally, increase cooperation internationally and fight corruption.
To achieve this, there are (several) new sheriffs in town. But what are the new measures, and what do UK companies have to do to ensure they don't fall foul?
The Fifth Anti-Money Laundering Directive (5AMLD)
The 5AMLD, finalised on 19 June 2018, closely follows the 4AMLD, which only came into force in June 2017. This is an EU directive and not a direct part of the Government's strategy, although it supports the goal of combatting money laundering, particularly in regards to terrorist activity.
Fortunately for UK companies, the latest directive is not as extensive as the fourth, which necessitated wholesale changes in the ways businesses approached money laundering.
The Fifth Directive focuses its gaze on cryptocurrencies, prepaid cards, high-value goods (above £10,000) and those dealing with high-risk third countries. It also requires companies to be more transparent with lists of Beneficial Ownership and Politically Exposed Persons. If this applies to your company, you should ensure you're compliant by the deadline in 2020.
Office for Professional Body Anti-Money Laundering Supervision (OPBAS)
To further strengthen the country's Anti-Money Laundering Capabilities, the Government set up the new OPBAS. Based within the FCA, the watchdog is another effort to fight terrorist financing within the UK.
The Economic Secretary to the Treasury, John Glen, said:
'This new watchdog will deepen the government’s partnership with the private sector as we work together to tackle illicit finance whilst minimising the burdens on legitimate businesses. This sends a clear message to criminals and terrorists that their dirty money is not welcome here.'
The Government's goal is to ensure the UK's current 25 anti-money-laundering supervisors meet the standards set out in the Money Laundering Regulations 2017 and has powers to investigate and penalise those who do not. Legitimate businesses will see little change in their day-to-day activities.
National Economic Crime Centre (NECC)
At the head of all these measures, former Home Secretary Amber Rudd announced the creation of the NECC in December 2017. The move also included appointing a new Minister for Economic Crime in the Home Office and staff from across the government and private sector.
The goal for the NECC is to improve intelligence into money laundering, increasing analytical capabilities and better coordinating the response to high-end economic crime, particularly organised crime and terrorism.
Thankfully for companies in the UK, these measures shouldn't mean them having to change the way they work too drastically or spend lots of time implementing new policies or procedures. Instead, providing they work as intended, the strategy should keep them protected from the ill effects of financial crime.