UK Treasury EU AML4 Directive

On Mar. 15, UK Treasury issued rules to implement EU AML directive.

  • Follows UK Treasury Sep. 2016 proposal on implementing AML directive, see #29068.
  • Said responsive to UK BEIS consultation on AML supervision cutting red tape review.
  • 2017 Measures
  • Create a new watchdog that will tackle potential weaknesses in supervisory system.
  • Aimed to make more difficult for criminals and terrorists, who are trying to exploit.
  • Establish an office for professional body anti-money laundering supervision (OPBAS).
  • Raise supervisory standards, ensure supervisors and law enforcement work together.
  • Money Laundering Regulation
  • OPBAS will complement updated money laundering regulations published by Treasury.
  • Draft regulations to bring the UK AML/CFT regime in line with international standards.
  • Require supervisors draw on common factors, when developing their risk assessments.
  • Also need maintain records of their investigations and decisions on disciplinary action.
  • OPBAS Role in Harmonization
  • Sectors subject to AML are supervised by 25 bodies, 22 are in accountancy and legal.
  • Use of different bodies can lead to inconsistencies that criminals may look to exploit.
  • Research shows serious and organised crime, costs the UK at least £24 bn every year.
  • Creation of OPBAS will ensure high standard across the regimes, by minimum burden.
  • Professional Body Coordination
  • OPBAS will set out how professional body AML supervisors should meet AML obligation.
  • Also ensure they do so, with the power to penalize any breaches of the EU regulation.
  • Government will approve one piece of AML guidance in each sector to reduce burden.
  • Complement Joint Money Laundering Steering Group Guidance, and FCA crime guide.
  • Politically-exposed Persons
  • Also provide clarity to firms, on their treatment of politically exposed persons (PEPs).
  • Steps address concern on disproportionate withdrawal of service from domestic PEPs.
  • FCA will publish specific guidance on low- and high-risk PEPs, and will consult shortly.
  • On Mar. 16, 2017, FCA proposed guide on treatment of transfers to PEPs, see #31498.
  • OPBAS Organization
  • OPBAS will be housed in the FCA and operate in its existing governance arrangements.
  • Funded by new fees on professional body AML supervisors and legislated by end 2017.
  • Government issued call for information on power, should be operational start of 2018.
  • Response to 2016 consultation, consult on draft regulation, comment to Apr. 12, 2017.
  • Specific OPBAS Consultation
  • On Mar. 16, 2017, Treasury also issued OPBAS consultation and proposals, see #31483.
  • Mar. 2017 JMLSG Consultation
  • On Mar. 21, 2017, joint money laundering steering group, proposed guidance for AML.
  • Reflected Treasury revision to UK money laundering regulations to adopt AML directive.
  • JMLSG guide also reflected ESA Oct. 2016 proposed risk factor guidelines, see #24268.
  • Changed electronic verification, so more even-handed enough, reflect current practices.
  • Consultation invited comments on the proposed changes to guidance, by Apr. 28, 2017.

Regulators UK FCA; UK Government; UK Treasury
Entity Types Auditor; Bank; BS; Ins
Reference CP, 474162, PR, 3/21/2017, PR, 3/15/2017, AMLD Dir 2015/849
Functions AML; Anti-Bribery; Client Money; Compliance; C-Suite; Financial; Legal; Operations; Reporting
Countries United Kingdom
Products Banking; Corporate; Insurance; Loan; Pensions
Regions EMEA
Rule Type Proposed
Rule Date 3/15/2017
Effective Date 4/21/2017
Rule Id 31471
Linked to Rule :29068
Report Issue 4/1/2017
Report Section UK

Last substantive update on 03/22/2017