Money Laundering Regulations
(13 years, 5 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
Today the Government are publishing their response to the review of the money laundering regulations, copies of which have been placed in the Libraries of both Houses. This includes proposals for consultation and a request for information on the costs and benefits of these proposals to inform robust analysis and ensure they will make the regulations more effective and proportionate. This follows a review by the Regulatory Policy Committee and approval from the Cabinet Reducing Regulation sub-Committee.
There has been an extensive period of engagement with industry, supervisors, law enforcement, business customers, private individuals and across Government. While I have concluded that the regulations and their implementation are broadly effective and proportionate in practice, more needs to be done.
Businesses are overly focused on process and I want to strengthen the risk-based approach provided for in the regulations, in order to ensure they are as effective as they can be in helping to prevent and detect money laundering and terrorist finance.
Through this response and the proposals for consultation it includes, I want to give businesses the confidence to adopt policies and procedures that reflect their own assessment of risk. To help achieve this, I am consulting on removing the criminal penalties in the regulations. Those responsible within businesses should not be applying the same requirements to all customers regardless of the level of risk they present because of a fear of prison if they get it wrong.
In addition to proposing changes to the regulations, my officials will be working to strengthen the risk-based approach in a number of other ways from the development of global standards by the financial action taskforce to working with the supervisors and providing further support for industry guidance in the UK.
The consultation closes on 30 August, after which changes to the regulations will be finalised and proposed with a view to them taking effect during 2012.