AML Reform on the Horizon

Posted on by Know Your Compliance
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29
Oct

AML Reform Summary

For the past 2 years, the Government has been consulting on proposed reforms to the UK’s anti-money laundering (AML) and counter-terrorism financing (CTF) supervision regime. The Government has now published its decisions of the responses, outcomes and reforms for the future of AML oversight.

The Current AML Oversight Structure

At the top of the reform agenda has been the current supervisory system for money laundering oversight and prevention. The present system is made up of numerous bodies overseeing different firms, depending on their industry and business type.

The Government has praised the work and efforts of the existing AML supervisors and has acknowledged that small improvements have been made. However, their conclusion is that “the current regime is complex and disjointed”.

  • 3 Public Sector Supervisors
  • The Financial Conduct Authority (FCA)
  • The Gambling Commission
  • His Majesty’s Revenue and Customs (HMRC)
  • 22 Private Sector Professional Body Supervisors (PBSs) 

New AML Supervision Regime

What's Next is written on a stack of post it notes.The Government put forward 4 possible options for the structure of future AML supervision. This week they have announced their decision to pursue Model 3, which will come into force after the relevant legislation has been drafted and approved. This model will see the creation a Single Professional Services
Supervisor (SPSS). Meaning the FCA will become the sole supervisory authority for all firms with obligations under the Money Laundering Regulations.

Those currently overseen by HMRC, the Gambling Commission or any one of the private sector professional bodies will (in the future) be supervised for AML compliance by the FCA. The Government estimates this to be around 60,000 firms! The regulator is obviously not new to AML supervision and are expected to work closely going forward with existing supervisors as well  law enforcement agencies.

What Will Change?

As of yet, we don’t know what, if anything will change in reference to how firms currently comply with the Money Laundering Regulations. It is hoped by industry professionals that firms will be able to carry on with existing AML policies and controls, albeit with a different supervising authority.

However, it is possible that the FCA will want to tighten up in areas of previous vulnerability and non-compliance, which could result in future changes to rules and requirements. The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is already housed within the FCA and is responsible for supervising the 25 professional body supervisors (PBSs) in the legal and accountancy sectors. The FCA are likely to utilise the reviews and findings of the OPBAS as they work towards a single supervisory system.

FCA Compliant AML Templates

Know Your Compliance Limited have been providing AML policy and control templates since the Money Laundering Regulations came into force in 2017. Our templates comply with the FCA, HMRC, the Gambling Commission other PBSs rules and requirements. We are therefore confident that our templates will continue to provide compliant solutions for those with obligations under the MLR, regardless of who is providing AML supervision.

As always, once any new legislation or rule changes come into effect, we will update our templates and policies accordingly and provide these free of charge to any previous purchasers.

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