Bribery, fraud and anti-money laundering | UK Regulatory Outlook September 2023

SRA updates guidance on law firm risk assessments

On 21 September 2023, the Solicitors Regulation Authority (SRA) updated its guidance on law firm risk assessments that applies to all firms subject to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

The guidance aims to help firms better understand their legal and regulatory obligations and how to comply with them. It includes tips and resources for completing effective risk assessments and answers to frequently asked questions. 

FCA launches review of treatment of Politically Exposed Persons

On 5 September 2023, the Financial Conduct Authority (FCA) launched a review of the treatment of domestically politically exposed persons (PEPs) by financial services firms.

The review will look into firms' arrangements for dealing with PEPs based in the UK for anti-money laundering purposes, including how firms are:

• applying the definition of PEPs to individuals;
• conducting proportionate risk assessments of UK PEPs, their family members and known close associates; and
• keeping their PEPs control under view to ensure they remain appropriate.

The review is due to report by the end of June 2024, and the FCA has stated that it will take "prompt action" if any significant deficiencies are identified in the arrangements of firms being assessed.

The FCA has previously published guidance on how financial services firms should treat customers who are PEPs.

HMRC publishes Economic Crime Levy Manual

On 1 September 2023, HM Revenue & Customs (HMRC) published its long-awaited Economic Crime Levy Manual.

As previously reported, the government introduced an economic crime levy on anti-money laundering regulated businesses to help fund the fight against economic crime.

The manual contains useful guidance and examples on the amount payable by relevant entities, including:

• ECL11400 – registering and reporting requirements;
• ECL26000 – ECL example: more than one accounting period ending within the financial year; and
• ECL42000 – transfers of debt from the Gambling Commission and the FCA.

Economic Crime and Corporate Transparency Bill nears Royal Assent

As previously reported, the Economic Crime and Corporate Transparency Bill is currently in its final stages of being passed in Parliament.

The bill, which seeks to strengthen the UK's response to economic crime, will include a new "failure to prevent fraud" offence, which makes a "body" – a company or organisation, legally liable if an employee or agent commits fraud.

On 11 September 2023, during a House of Lords consideration of the bill, they voted to extend the scope of the offence to both large and "non-micro" organisations. The House of Commons however was in disagreement and "insists" that the offence be restricted to large organisations. 

The bill is due to return to the House of Lords for further consideration on 18 October 2023.

Government updates guidance on register of overseas entities

On 8 August 2023, the government published updated guidance on the Register of Overseas Entities – registration and verification, providing an overview of the register, which went live on 1 August, and the requirements that the Economic Crime (Transparency and Enforcement) Act 2022 places on overseas entities.

The guidance, aimed at overseas entities and beneficial owners of overseas entities that own land in the UK, reflects changes on:

• identifying foreign limited partners as beneficial owners; and
• changes made to rectification, dispositions, financial penalties and protected information.

See our Insight for further information.

JMLSG consults on new cryptoasset transfer guidance and revises guidance on managing impersonation fraud risk

Please see Fintech, digital assets, payments and consumer credit.

PSR consults on APP fraud maximum reimbursement level for FPS and CHAPS and on consumer standard of caution for APP fraud

Please see Fintech, digital assets, payments and consumer credit.