HM Treasury has published the first money laundering and terrorist financing (AML/CTF) national risk assessment (NRA). It may be recalled that earlier this year it published a supervision report on AML/CTF for 2013-14 – see Regulatory Roundup 64.
Chapter 6 concerns the ‘regulated sector’; for the purposes of the paper this term refers to all the entities subject to the Money Laundering Regulations 2007 so will capture e.g. estate agents and casinos as well as financial institutions. It probably will not be surprising to learn that ‘Banking’ – under which heading we also find ‘private and wealth management’ – is assessed as a high risk for money laundering and medium for terrorist financing. In contrast the ‘money service business’ (which will include money remitters) has the opposite rating i.e. medium risk for money laundering but high risk for terrorist financing. E-money firms are not covered in chapter 6 but instead appear in a chapter devoted to ‘new payment methods’ and are assigned a medium/low rating for AML/CTF.
The NRA reveals that the collective knowledge of UK law enforcement agencies, supervisors and the private sector of money laundering and terrorist financing risk is “not yet sufficiently advanced”. The government has already committed to publishing an Anti-Money Laundering Action Plan, the priorities of which will include plugging intelligence gaps and addressing identified inconsistencies in the supervisory regime.