In the UK, the responsibility for Anti-Money Laundering (AML) supervision primarily falls under the HM Revenue & Customs (HMRC). HMRC is the government department responsible for collecting taxes, and it also plays a role in AML supervision for certain sectors. The Money Laundering Regulations set out the AML requirements that different types of businesses and entities must adhere to.
The following are some of the key sectors that fall under AML supervision by HMRC:
Financial Institutions: This includes banks, building societies, credit unions, and other financial service providers such as payment institutions and electronic money institutions.
Money Service Businesses (MSBs): This category includes money transfer businesses, currency exchange offices, and certain types of payment service providers.
High-Value Dealers (HVDs): Businesses dealing in high-value goods, such as art dealers, auction houses, and dealers in precious metals or stones, are subject to AML regulations.
Estate Agents: Estate agency businesses involved in property transactions, sales, and lettings are under AML supervision.
Accountants and Tax Advisors: Public accountants, tax advisors, and auditors are subject to AML regulations.
Trust or Company Service Providers (TCSPs): Firms that provide services related to setting up or managing companies or trusts fall under AML supervision.
Legal Professionals: Solicitors and other legal professionals involved in certain financial or real estate transactions are also covered by AML regulations.
Chartered Accountants: Members of the Institute of Chartered Accountants in England and Wales (ICAEW) and other professional accountancy bodies are supervised by HMRC.
Cryptoasset Businesses: Cryptocurrency exchanges and wallet providers are subject to AML regulations as of January 2020.
The responsibilities of businesses or entities that fall under money laundering supervision in the UK can vary based on the specific type of business and its activities.
Here are some key responsibilities for entities under money laundering supervision in the UK:
AML Compliance Program: Businesses subject to money laundering supervision must establish and maintain an effective Anti-Money Laundering (AML) compliance program. This program should include policies, procedures, and internal controls designed to prevent money laundering and terrorist financing.
Customer Due Diligence (CDD): Regulated entities must conduct customer due diligence to verify the identities of their customers, understand the nature of their business relationship, and assess the potential risk of money laundering or terrorist financing.
Enhanced Due Diligence (EDD): In cases where higher risks are identified, such as dealing with politically exposed persons (PEPs) or high-risk jurisdictions, enhanced due diligence measures should be applied.
Ongoing Monitoring: Entities are responsible for ongoing monitoring of their business relationships to detect and report any suspicious activities.
Training: All relevant employees should receive regular AML training to understand the risks associated with money laundering, the company's AML policies, and how to report suspicious activities.
Record Keeping: Regulated entities must keep adequate records of customer identification, transaction details, and AML measures taken. These records should be retained for a specified period.
Reporting Suspicious Activities: If a business or entity has reasonable grounds to suspect that a transaction is related to money laundering or terrorist financing, they must file a Suspicious Activity Report (SAR) with the National Crime Agency (NCA).
Appointing a Money Laundering Reporting Officer (MLRO): Some businesses are required to appoint an MLRO responsible for overseeing the AML compliance program and ensuring SARs are appropriately submitted.
Risk Assessments: Regular assessments of money laundering and terrorist financing risks should be conducted, and appropriate measures should be implemented to mitigate those risks.
Cooperation with Authorities: Regulated entities are expected to cooperate fully with law enforcement and regulatory authorities in their efforts to combat money laundering and terrorist financing.
These responsibilities are based on the UK's Money Laundering Regulations, which are subject to change and updates. Therefore, it's essential for businesses to stay informed about the latest regulations and guidance provided by the relevant supervisory authorities, such as the Financial Conduct Authority (FCA) or HM Revenue & Customs (HMRC). Non-compliance with AML obligations can result in severe penalties and legal consequences.
