FATF publishes UK mutual evaluation

FATF has published the long-awaited mutual evaluation report on the UK’s measures to combat money laundering and terrorist financing.

The report notes that, because of the exceptionally large funds flow through the UK financial sector and the risks that some of these have links to crime and terrorism, there is a strong understanding of the risks and policies to address them. FATF found an aggressive prosecution culture, and powerful tools to obtain information on beneficial ownership and other matters. But it noted the UK lacks resources for financial intelligence and that the SAR regime requires modernisation and reform.

The report noted pleasing engagement of supervisors and measures that would prevent criminal or their associates controlling a financial institution. However, it did also point out that some supervisors were more engaged than others.

On the whole, the UK’s prosecution of money laundering and terrorist financing activities, and its leading role in designating terrorists as well as high effectiveness in implementing financial sanctions domestically, were all praised.

In relation to SARs, the report praised the large number of high quality SARs that we made, but noted low levels of reporting in some sectors, and still a significant amount of low quality SARs. FCA and HMRC were praised for their understanding and engagement with risks, but FCA could pay more attention to firms outside the 170 it covers in its proactive supervision programmes.



Emma Radmore