BEIS has published a summary of views and evidence submitted to the Cutting Red Tape review of the AML and CFT regime. Comments were mainly around:
- large, often confusing and sometimes duplicated amounts of supervisory guidance, which sometimes fail to make clear what is a legal requirement and what is good practice cause firms to incur significant costs. There were conflicting views on the usefulness of the JMLSG guidance but significant comments over the process for its approval. Many firms feel they need to hire consultants to help them get compliance right;
- some businesses say the fear of the prescriptive approach stops firms from challenging regulatory guidance, and Fintech companies say businesses are loathe to buy new technological solutions because supervisors prefer traditional methods. Some respondents feel nervous acting in line with their own risk assessments because of the supervisory obsession with CDD;
- smaller firms in particular suffer because of the complexity of CDD and the costs of CDD sometimes outweigh the values of doing business with SMEs. Many complained of banks’ derisking strategies;
- firms do not feel it is safe to use the reliance technique; and
- many complained of lack of supervisory feedback and said lack of willingness on the part of the Government and supervisors to share data was making compliance even more difficult .