Q & A Series | Anti-Money Laundering Regulations

Key Legislation, Regulatory Boards and Associations

The legal framework of anti-money laundering AML regulations

GLOBAL

• • The Financial Action Task Force (FATF)

Policy-making body that sets anti-money laundering international standards and counter-terrorist financing measures and recommendations globally. The FATF also assesses nations on their implementation and effective use of these standards.

• • EU – The 5th and 6th AMLD

The 5th AMLD came into effect January 2020.

The 5th directive requires firms to examine the background and purpose of a wider range of transactions. It proposes, for example, extra EDD measures for business relationships and transactions in relation to high-risk 3rd countries.

The 6th AMLD is to come into effect in June 2021.

Aims to tackle legislative inconsistencies in order to fight money laundering more effectively and cooperatively. The aim is to create a harmonious legal definition of money laundering and its predicate offenses between the member states.

UK

• • The Financial Conduct Authority (FCA)

Regulates the UK financial sector, setting standards to combat financial crime such as money laundering and the funding of terrorism. In partnership with the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) to strengthen the UK’s anti-money laundering supervisory regime.

• • HMRC

HMRC is a supervisory body for Money Laundering Regulations. You can find a list here of all the supervisory and professional bodies which your firm might have to register with before trading.

• • The Joint Money Laundering Steering Group

Provides assistance and guidance to promote good practices and standards for firms when tackling money laundering. This group’s guidance is backed by the HM Treasury.

• • The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019

Regulations require you to apply risk-based customer due diligence measures to prevent your services and business from being used for money laundering.

• • The Proceeds of Crime Act 2002

Sets out the framework of the criminality of money laundering, detailing the numerous offenses associated with this line of financial crime. It also mandates the need to submit a Suspicious Activity Report to the National Crime Agency if you know or suspect that a person is engaged in, or attempting, money laundering.