UK Treasury Launches Consultation into Money Laundering Regulations

A news graphic overlay on an image of an elegant, historical building with a clear blue sky, announcing the uk treasury's launch of a consultation into money laundering regulations.

HM Treasury has published a consultation into the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the Money Laundering Regulations), which impose various obligations on a range of businesses to identify and prevent money laundering and terrorist financing.

The consultation was launched on 11 March 2024 and covers four key themes:

  1. Making customer due diligence more proportionate and effective.
  2. Strengthening system coordination.
  3. Providing clarity on the scope of the Money Laundering Regulations.
  4. Reforming registration requirements for the Trust Registration Service.

The latest consultation, ‘Improving the Effectiveness of the Money Laundering Regulations’, builds on the findings of a previous government review into the UK’s anti-money laundering and counter-terrorist financing regulatory and supervisory regime, which was undertaken in 2022.

This previous review found that, while the core requirements of the regulations were mostly fit for purpose, there were potentially several technical changes that could be made to increase effectiveness and ensure proportionality for both regulated firms and customers.

Currently, around 100,000 businesses in the UK fall within the scope of the Money Laundering Regulations, which place requirements on financial institutions and other professional industries at a high risk of enabling money laundering and terrorist financing. Banks, accountants, lawyers, estate agents, casinos, and high-value art dealers must all comply with AML rules.

The National Crime Agency (NCA) estimates that over £12 billion of criminal cash is generated each year in the UK, and the scale of money laundering’s impact on the UK could run into the hundreds of billions of pounds annually. 

Brexit and the emergence of new financial activities, such as cryptoassets, have added to the complexity of compliance requirements on the financial industry.

In her ministerial address to the consultation, British Treasury Minister Baroness Vere said: “Smarter regulation is fundamentally about ensuring that all areas of UK regulation work as well as they can, where regulation is needed.

“This includes minimising regulatory burden and future proofing regulations, making regulation a last resort and not a first choice, and ensuring a well-functioning landscape of regulators that are responsive and accountable.”

“This shift allows tailored policies, better aligning with the UK’s financial and economic landscape,” she continued.

“A key principle in the MLRs is proportionality. Where there is room to find a better balance between what we ask of regulated firms and customers, and the risk of money laundering and terrorist financing, then we want to seek to address this.”

HM Treasury is also running a survey on the cost of compliance with the Money Laundering Regulations in parallel with the consultation. The government hopes the results will help it better understand how regulated businesses comply with the Money Laundering Regulations and assess the impact of future changes.

To take part in the survey, click here.

Both consultations are open for three months and close on 9 June 2024.

AML Solutions for Regulated Services

We can help organisations of all shapes and sizes from across different sectors undertake a review of their policies, controls, and procedures to ensure that they are compliant with AML regulations and, therefore, avoid any breaches.

A review of this nature provides valuable insight into a business when performed correctly. Along with an overview of risk, these crucial assessments also highlight issues within the business, so it is essential to undertake a proper review. All of a company’s building blocks must be considered, including its staff, clients, operations, and finances.

By working with AML & Compliance, a business can be assured that we will bring the required level of knowledge and expertise needed to perform the review, which adds value to the business and is not simply a box-ticking exercise. Our team can also provide a full range of services that include:

  • Consultancy.
  • Compliance Policies.
  • Training.
  • Handbooks.
  • Auditing.

Our services focus on businesses’ Anti-Money Laundering and Regulatory requirements through the implementation of effective policies, procedures, training, and consultancy. We also provide continued monitoring of staff and ongoing training to ensure that everyone within a business is aware of the latest requirements and complies with their responsibilities.

We offer a full range of services focused on ensuring businesses across all regulated sectors create, maintain and evidence their compliance with the requirements of their regulators and legislation. We work with businesses of all sizes, from the smaller high street or niche businesses to the large multi-office and multinationals.

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We adopt a sensible and pragmatic approach to fees, ensuring we are competitive and always add value. As necessary, we will agree on packaged services to control cost and enable clients to spread payments to alleviate cash flow, yet ensure services are provided when needed.

If you want to discuss our services in more detail, contact us at 0203 985 8553, email us at info@amlandcompliance.co.uk or complete an enquiry form.