Action Plan: Anti-money Laundering and Counter-terrorism Finance

Baroness May of Maidenhead Excerpts

Thursday 21st April 2016 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

Today, the Government are publishing an action plan that sets out the steps that the UK will take to strengthen their response to money laundering and terrorist financing, and to protect the safety of its citizens and the integrity of the UK financial system. Copies will be available on www.gov.uk and in the Library of the House.

This action plan will tackle all forms of money laundering, with a particular focus on the illicit funds supporting and generating serious and organised crime, which deprives people of their security and prosperity; terrorism, which poses a direct and immediate threat to our domestic security and overseas interests; and the laundering of the proceeds of overseas corruption into or through the UK, which fuels political instability in the source countries.

This Government have already taken significant action to tackle these damaging crimes and to improve the reputation of the UK, including of our financial and professional services industries. The National Risk Assessment on Money Laundering and Terrorist Financing (NRA), published in October 2015, was candid and robust in its assessment and set out our current understanding of the risks to the UK and the gaps in our response. The action plan addresses the gaps identified.

The Prime Minister’s Anti-Corruption summit next month will galvanise the international response to issues including corporate secrecy, Government transparency, the enforcement of international anti-corruption laws, and the strengthening of international institutions.

This action plan sets out changes that amount to the most significant reform to our anti-money laundering regime for over a decade, since the commencement of the Proceeds of Crime Act 2002.

We will:

Enhance the law enforcement response

Consult on tough new powers to tackle money laundering, including unexplained wealth orders (UWO) to require those who are suspected of money laundering to explain the sources of their wealth; the provision of a linked forfeiture power for use where the answers provided are unsatisfactory, or where the subject of the UWO fails to respond; the provision of a power to designate the highest risk entities and require additional regulatory measures to be carried out on them by the regulated sector; and the closing of loopholes that can be exploited by terrorists to raise and move funds.

Deliver new capabilities and support to take on the most sophisticated ‘high-end’ money laundering cases, and to ensure that operational partners have, and are able to use, an appropriate and effective suite of tools to counter terrorist finance.

The Government have already established a cross-agency taskforce, recently announced by the Prime Minister, to investigate all evidence of illegality that may emerge from the data relating to Mossack Fonseca, the law firm based in Panama.

Improve the effectiveness of the supervisory regime

Undertake a wide-ranging review of the supervisory regime to develop radical options for reform aimed at ensuring we have an effective and proportionate system. Engagement has already begun with stakeholders and the public call for information is included within the action plan.

Increase our international reach

Promote more effective information sharing across international boundaries.

Place new NCA International Liaison Officer posts in selected jurisdictions.

Training will be delivered to, and expertise shared with, key overseas partners to combat terrorist finance.

Work with international partners to tackle money laundering and terrorist financing threats upstream, and develop multilateral approaches in preparation for the Prime Minister’s Anti-Corruption summit in May 2016.

Develop a stronger partnership with the private sector

Radically reform the suspicious activity reports (SARs) regime (the statutory regime under which persons in the regulated sector must report suspicions of money laundering or terrorist financing to the National Crime Agency), make better use of public and private sector resources against the highest threats, target the entities who carry out money laundering instead of individual transactions, and provide the National Crime Agency with a suite of new powers, including one to oblige SARs reporters to provide additional information when requested.

Make the Joint Money Laundering Intelligence Taskforce (JMLIT) a permanent feature of the UK’s anti-money laundering regime, which brings together the financial sector, law enforcement agencies and the Financial Conduct Authority to share information to prevent, detect and disrupt money laundering and terrorist financing activities.

Consult on proposed new powers to provide the financial sector with ‘safe harbour’ for the sharing of information on financial crime.

The reforms to our domestic anti-money laundering and counter-terrorist financing regime set out in the action plan, coupled with the international leadership being shown by the UK through the Prime Minister’s Anti-Corruption summit, will lead to greater disruption of money laundering and terrorist financing activities, the prosecution of those responsible and increased recovery of the proceeds of crime, and a greater protection of the UK financial system.

[HCWS686]