HM Treasury AML and CTF Report 2013 to 14

With ‘financial crime’ having joined the FCA’s top seven risks – see the article on the FCA Business Plan in this Regulatory Roundup – the publication by HM Treasury of its ‘Anti-money laundering and counter terrorist finance supervision report 2013-14’ is timely.

The report acts as a useful reminder that whilst the regulated industry may think in terms of the FCA being the AML/CTF supervisory authority, the UK Money Laundering Regulations 2007 also captures the likes of casinos, legal professionals, tax advisers etc. as per Regulation 3.  As a result there are 27 AML/CTF ‘supervisors’ (HM Treasury is responsible for their appointment) ranging from the FCA to the Faculty Office of the Archbishop of Canterbury (‘AoC’).  The Report is based upon responses received from the supervisors, although three of them – including the AoC – did not submit their returns.

Interestingly, of the combined total of 11,489 desk based reviews and compliance visits (‘inspections’) undertaken by supervisors in 2013-2014, for various reasons (including seven supervisors that either do not currently record the outcome of their visits or do not record the specific outcome of AML/CFT compliance where the visit covers broader regulatory activity) there were no results of assessment available in 31% of those cases. On the positive side, only 4% of firms were found to be ‘non-compliant’.

The report’s conclusions include (a) that firms are ‘broadly compliant’ with their AML/CFT obligations and (b) that whilst supervisors have a high level of awareness of the need to take a risk-based approach, the majority of them had difficulty articulating how their assessment of risk translated into their monitoring approach.

The report advises that in keeping with FATF expectations, HM Treasury and the Home Office undertook the first UK AML/CFT national risk assessment (‘NRA’); a summary of the NRA findings will be published in due course.