Regulatory Outlook | Anti-bribery, corruption and financial crime | July 2021
Published on 20th Jul 2021
Updated national anti-money laundering (AML) risk assessment
As required to do under the Money Laundering Regulations, the UK government has published its updated national anti-money laundering risk assessment.
This highlights changes in the AML risk profile across a number of key sectors including financial services and real estate.
Cryptocurrency is within the risk assessment for the first time and there is heightened risk noted within the property and estate agency sector.
Businesses are advised to review their own AML risk assessments in light of the revised national picture, and consider whether further or improved internal systems and controls are needed to mitigate any new or increased risks.
Possible uptick in HMRC corporate tax evasion prosecutions in aftermath of Covid-19
HMRC has stated that it has over 30 investigations or opportunities relating to the potential enforcement of the corporate failure to prevent the facilitation of tax evasion offence, and is likely to come under significant pressure from HM Treasury to assist in increasing the tax intake in light of the huge sums spent in tackling the pandemic.
In light of the risk presented by this offence to some businesses, the due diligence undertaken on third parties performing services for or on its behalf should be reviewed and any necessary measures adopted. These might include requiring warranties from third parties that they will comply fully with all tax obligations and adopting relevant contractual provisions in the event that they fail to do so.
Revised CPS guidance on prosecuting the section 330 failure to disclose offence
On 2 June 2021 the Crown Prosecution Service (CPS) issued revised guidance relating to its approach to the prosecution of the failure to disclose offence contained in section 330 of the Proceeds of Crime Act 2002.
Critically, in a departure from its previous position with regard to the offence, the guidance now provides that it will not be necessary to prove that money laundering had been planned or undertaken.
This change had not been flagged to, or anticipated by, either the financial services sector or the legal community. The offence has not previously been prosecuted on a regular basis and whether this change in guidance signals a more aggressive approach to enforcement remains to be seen. However, given the change, which is not retrospective in effect, the regulated sector should now have regard to the new guidance when considering the need to make any future disclosure and should err on the side of caution if in any doubt, taking expert legal advice as and when necessary.
Dates for the diary
2022: Possible extension of the corporate failure to prevent offence to cover all forms of economic crime including money laundering and fraud, which may follow the current Law Commission review of corporate criminal liability.
Late 2021/2022: Possible changes and improvements to the Suspicious Activity Report system and/or Action Fraud reporting, aimed at enabling the authorities to receive more focused reports that will provide increased intelligence.