Case Studies

UK finance regime assessed

by Mark Rowe

The UK has a well-developed and robust regime to effectively combat money laundering and terrorist financing. That is according to an assessment by the Financial Action Task Force (FATF) of the UK’s anti-money laundering and counter terrorist financing (AML/CFT) system.

Briefly, the FATF is an inter-governmental body set up in 1989. It points out that the UK is the largest financial services provider. As a result of the exceptionally large volume of funds that flows through its financial sector, the country also faces a significant risk that some of these funds have links to crime and terrorism.

The UK aggressively pursues money laundering and terrorist financing investigations and prosecutions, achieving 1400 convictions each year for money laundering, the FATF notes. The UK has been highly effective in investigating, prosecuting and convicting a range of terrorist financing activity and has taken a leading role in designating terrorists at the UN and EU level. The FATF did find areas of weakness, such as supervision and the reporting and investigation of suspicious transactions.

As for Suspicious Activity Reports (SARs), the assessment found the SAR regime needs a significant overhaul which would improve the financial intelligence available to the competent authorities. There remains an under-reporting of suspicious transactions by higher risk sectors such as trust and company service providers (TCSPs), lawyers, and accountants. The report suggests that the UK increase the human resources available to the UKFIU (Financial Intelligence Unit).

Separately, Israel has become the 38th member of the FATF, joining 35 jurisdictions and two regional organisations.

To download the full report or a summary visit the FATF website.


Donald Toon, Director of the National Economic Crime Centre at the NCA said of the report: “It shows law enforcement is aggressively pursuing the global fight against illicit finance and the NCA uses the fullest extent of powers to pursue and deny the illicit assets of those that pose the highest harm to the UK. We are not complacent and there is always more we can do. In our new National Economic Crime Centre we, and our law enforcement partners, are working with the regulatory and private sectors to deliver a better, whole system response to economic crime.”

And Ian Mynot, Head of the UK’s Financial Intelligence Unit said: “The UKFIU undertakes important analytical work, for example in respect of identifying terrorist financing, and fast time analysis where urgent law enforcement action is required. It does not seek to replicate analysis that can be done effectively by others. This is the right approach for the UK. The report recognises the extensive use of SARs across a wide range of law enforcement activities, and the results against money laundering and terrorist financing that SARs contribute to.”

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