{"id":1639,"date":"2020-01-24T14:12:00","date_gmt":"2020-01-24T14:12:00","guid":{"rendered":"http:\/\/blogs.uwe.ac.uk\/bristol-law-school\/?p=1639"},"modified":"2020-01-24T14:12:05","modified_gmt":"2020-01-24T14:12:05","slug":"insights-from-the-uks-implementation-of-key-anti-money-laundering-obligations","status":"publish","type":"post","link":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/insights-from-the-uks-implementation-of-key-anti-money-laundering-obligations\/","title":{"rendered":"Insights from the UK’s Implementation of Key Anti-Money Laundering Obligations"},"content":{"rendered":"\n

Blog written by Samantha Bourton, Lecturer in Law at UWE Bristol.<\/em><\/p>\n\n\n\n

\"\"
Photo: Samantha Bourton<\/figcaption><\/figure><\/div>\n\n\n\n

Money laundering refers to the process used by\ncriminals to conceal or disguise the profits of their illegal activities and is\nknown to have devastating effects on society, national security, the economy\nand the integrity of financial institutions. This is because money laundering\npotentially enables criminals, such as drug traffickers, terrorists, and tax\nevaders, to remain undetected and to channel their profits into further illegal\nactivities. The United Nations Office on Drugs and Crime estimates that 2-5% of\nglobal GDP is laundered each year, while the National Crime Agency estimates\nthat hundreds of billions of pounds are laundered annually in the UK alone. Accordingly,\nan international legal framework has been developed to combat this financial\ncrime, with almost all countries globally committed to implementing the Financial\nAction Task Force (FATF) Recommendations on Combatting Money Laundering and the\nFinancing of Terrorism. <\/p>\n\n\n\n

The EU has implemented the Recommendations via a\nseries of directives and has introduced its own measures to combat money\nlaundering in the wake of the Panama Papers and recent terrorist attacks in\nEurope. One of the main innovations of the EU directives is the requirement for\nMember States to set up registers of the beneficial owners of legal entities\nand trusts. The fifth EU anti-money laundering Directive requires the\ninformation contained in the register of legal entities to be available to the\npublic, while the register of trusts should be available to law enforcement\nauthorities and those who can demonstrate a legitimate interest in the\ninformation. The aim of such registers is to reveal the identities of those who\nuse companies to launder money and carry out illegal activities. <\/p>\n\n\n\n

On Friday 29th<\/sup> November, I delivered a\npaper titled \u2018Insights from the United Kingdom\u2019s Implementation of Key\nAnti-Money Laundering Obligations\u2019 at the CFE Tax Advisers 12th<\/sup>\nEuropean Conference on the Tax Advisers\u2019 Professional Affairs in Paris. The\nConference aimed to examine the impact of the fifth European Union (EU)\nAnti-Money Laundering Directive, which Member States were required to transpose\nby the 10th<\/sup> January 2020. The speakers included representatives from\nthe CFE, OECD, and the BASEL Institute on Governance, as well as legal practitioners\nand academics from several Member States. <\/p>\n\n\n\n

My paper examined the UK\u2019s implementation of some of\nthe key obligations contained in the 4th<\/sup> and 5th<\/sup> EU\nAnti-Money Laundering Directives, including the inclusion of tax evasion as a\npredicate, or underlying, offence to money laundering and the introduction of\nbeneficial ownership registers. The paper focused on the UK as a case study, as\nthese measures were part of its legal framework long before they became an\nobligation within the EU; tax evasion has been a predicate offence to\nlaundering in the UK since 1993 and the UK established the first publicly\naccessible beneficial ownership register in the G20, the People with\nSignificant Control (PSC) Register. <\/p>\n\n\n\n

The paper highlighted the benefits generated by\nthese developments in the UK. Under the anti-money laundering legal framework,\nprofessionals in the regulated sector are required to submit reports, known as\nsuspicious activity reports (SARs), to the National Crime Agency when they know\nor suspect that a client is engaged in money laundering. With the inclusion of\ntax evasion as a predicate offence to laundering, in the UK, professionals are\nrequired to submit SARs when they know or suspect that their clients are\nengaged in tax offences. This has led to a significant recovery of revenue,\nwith the intelligence generated by the reports supporting the collection of\nover \u00a340.2million in tax revenue from civil enquiries in 2018-19. The paper\nalso highlighted research undertaken by the NGO Global Witness on the benefits\nof the UK\u2019s PSC Register in detecting and preventing criminal activity. For\nexample, Global Witness found that there has been an 80% reduction in the rate\nof incorporation of Scottish Limited Partnerships (SLPs) since SLPs have been\nsubject to beneficial ownership requirements. SLPs are often associated with\nfinancial crime and were used in the Russian and Azerbaijani Laundromats.<\/p>\n\n\n\n

However, the paper also cautioned against the\nimplementation of these measures without appropriate resources devoted to their\nenforcement, or guidance provided on their operation. The information contained\nin the UK\u2019s PSC register is not currently verified, leading to the inclusion of\ninaccurate and misleading information. This has caused some law enforcement\nauthorities in the UK to refrain from using the register in investigations,\neffectively defeating its objective. In addition, the paper identified the\ndifficulties professionals face in complying with the obligation to submit SARs\nfor tax offences in the UK and stressed how these problems are likely to be\nexacerbated when these obligations are imposed at a European level. <\/p>\n\n\n\n

I concluded the paper by recommending that the EU\nshould define tax evasion for the purposes of the EU anti-money laundering\ndirectives and should provide further guidance on how Member States should\nverify the information contained in beneficial ownership registers. <\/p>\n","protected":false},"excerpt":{"rendered":"

Blog written by Samantha Bourton, Lecturer in Law at UWE Bristol. Money laundering refers to the process used by criminals to conceal or disguise the profits of their illegal activities and is known to have devastating effects on society, national security, the economy and the integrity of financial institutions. This is because money laundering potentially … Continue reading “Insights from the UK’s Implementation of Key Anti-Money Laundering Obligations”<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":1641,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wds_primary_category":0,"footnotes":""},"categories":[2,262,347,237,353,354],"tags":[],"class_list":["post-1639","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bristol-law-school","category-event","category-faculty-of-business-and-law","category-research","category-uwe-bristol","category-uwe-bristol-research"],"_links":{"self":[{"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/posts\/1639","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/comments?post=1639"}],"version-history":[{"count":1,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/posts\/1639\/revisions"}],"predecessor-version":[{"id":1642,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/posts\/1639\/revisions\/1642"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/media\/1641"}],"wp:attachment":[{"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/media?parent=1639"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/categories?post=1639"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.uwe.ac.uk\/bristol-law-school\/wp-json\/wp\/v2\/tags?post=1639"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}