Bribery, fraud and anti-money laundering | UK Regulatory Outlook January 2023
Published on 27th Jan 2023
Amendments to Economic Crime and Corporate Transparency Bill | HMT annual supervision report for 2020-2022 on anti-money laundering and counter-terrorist financing | Minimum threshold amount for money laundering offences raised from £250 to £1,000
Amendments to Economic Crime and Corporate Transparency Bill
As mentioned in our September 2022 issue, the Economic Crime and Transparency Bill was introduced in the House of Commons on 22 September 2022.
The bill, which is now due to have its report stage, will introduce, among other changes, amendments to the register of overseas entities, as well as removing the statutory cap for the Solicitors Regulation Authority for financial penalties imposed for economic crime matters.
In particular, an offence of failure to prevent fraud or money laundering was also introduced as an amendment, a motion which was subsequently withdrawn in a debate on 29 November 2022. However, in a debate in the House of Commons on 25 January 2023, a number of new clauses were tabled for inclusion in draft legislation, including failure to prevent fraud, money laundering and false accounting. See our Insight for more.
The bill is currently at the report stage, with the timeline still to be announced at the time of writing.
HMT annual supervision report for 2020-2022 on anti-money laundering and counter-terrorist financing
On 19 December 2022, His Majesty's Treasury (HMT) published its annual report for 2020 to 2022 on anti-money laundering (AML) and counter-terrorist financing.
The Financial Conduct Authority (FCA), as the statutory supervisor under the Money Laundering Regulations 2017, found that the sectors that remain most vulnerable to financial crime and which are at the greatest risk of being exploited for money laundering purposes are:
- retail banking;
- payments and digital assets;
- wholesale financial markets; and
- wealth management.
In addition, public body supervisors responsible for supervision in the accountancy and legal sectors noted that often non-compliance and poor AML procedures were most common with smaller firms and sole practitioners, having failed to understand the importance of implementing adequate AML controls.
In the coming years, HM Treasury will aim to increase the effectiveness of the current supervisory regime through consultation with supervisors and the industry on future amendments to the Money Laundering Regulations, in order to ensure a comprehensive response to emerging risks and issues faced.
Minimum threshold amount for money laundering offences raised from £250 to £1,000
On 19 December 2022, the Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022 was passed.
The order increases from £250 to £1,000 the "threshold amount" – the value of criminal property below which any bank or similar firm such as an electronic money or payment institution suspicious of money laundering, can carry out a transaction without committing a money laundering offence under the Proceeds of Crime Act 2002 section 339A.
PSR pushes for wider adoption of confirmation of payee tool in fighting fraud
The Payment Systems Regulator has pushed for wider adoption of confirmation of payee systems by other payment service providers. For more on this, see our Insight and the Fintech, digital assets, payments and consumer credit sections .
PSR proposed fraud refund mechanism
Please see Fintech, digital assets, payments and consumer credit section.
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