Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, how he plans to assess the effectiveness of the implementation in the UK of the EU Anti-Money Laundering Directive.

The EU’s fourth Anti-Money Laundering Directive (‘the Directive’) was formally adopted in June 2015, and Member States now have until June 2017 to transpose its requirements into national law. The Government plans to publish a consultation on transposition of the Directive by early spring which will run for a full 12 weeks. We will consult on areas where the Directive gives us options or discretion on how we transpose its provisions as well as areas where we can improve the UK’s anti-money laundering and counter-financing of terrorism (AML/CFT) regime.

Transposition of the Directive is just one element of the Government’s comprehensive Anti-Money Laundering regime. HM Treasury and Home Office are working closely on a forthcoming Action Plan to address the issues identified in the UK’s first National Risk Assessment of Money Laundering and Terrorist Financing, in order to increase the effectiveness of the AML/CFT regime. This work is overseen jointly by Home Office and Treasury Ministers.

Scrutinising all aspects of the UK’s AML/CFT regime, the Financial Action Task Force (FATF) Mutual Evaluation of the United Kingdom will be the ultimate test of effectiveness and will take place in the course of 2017 and 2018. The FATF Mutual Evaluation will judge both the technical compliance and effectiveness of the UK’s AML/CFT regime. But the implementation of the Directive will be key to achieving a successful evaluation, as the Directive will enact the FATF standards into UK domestic law.

By undertaking this work, we are further ensuring that our anti-money laundering and counter-financing of terrorism regime is robust and sufficiently responsive to emerging threats.