Shearman & Sterling LLP | FinReg | HM Treasury Publishes Report on Activities of Anti-Money Laundering and Counter-Terrorist Financing Supervisory Bodies
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  • HM Treasury Publishes Report on Activities of Anti-Money Laundering and Counter-Terrorist Financing Supervisory Bodies
    HM Treasury has published a report on the activities undertaken by the U.K.'s anti-money laundering and counter-terrorist financing supervisory bodies in 2017-2018. The report follows the publication of the Financial Action Task Force's Mutual Evaluation Report, published in December 2018. The Mutual Evaluation Report found that the U.K.'s AML/CTF regime was the strongest of all the countries assessed by the FATF. However, the report still identified shortcomings in regulated firms' compliance with the Money Laundering Regulations 2017 and the performance of supervisory bodies responsible for overseeing AML/CTF activity.

    The U.K.'s supervisory bodies include those governing the accountancy industry (including the Institute of Financial Accountants and the Chartered Institute of Management Accountants) and the legal industry (including the Law Society and General Council of the Bar), as well as statutory supervisors such as HM Revenue and Customs and the Financial Conduct Authority. The MLRs appoint HM Treasury as the authority responsible for appointing AML/CTF supervisors. The Office for Professional Body AML Supervision was established in 2018 as the government body responsible for overseeing supervisory bodies' actions in the AML/CTF sphere.

    HM Treasury's report identifies the supervisors' key supervisory activities, which include:
    • Undertaking analysis of their respective industries through onsite visits and desk-based reviews;
    • Identifying areas of non-compliance with the MLRs, which include failures to carry out client risk assessments and appropriate customer due diligence; and
    • Cooperation with other supervisory authorities and coordination of AML and CTF activities, as required by the MLRs.

    In 2018, OPBAS met with all supervisory bodies and published a report on their respective AML/CTF regimes. HM Treasury expects supervisory bodies to meet the action plans they agreed with OPBAS and will continue to convene meetings with these bodies to ensure issues are addressed. The government also plans to publish a new Economic Crime Plan in partnership with the private sector in order to establish effective private sector risk controls and AML/CTF supervision.

    View HM Treasury's AML/CTF Report.

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