HM Treasury has published its fourth annual anti-money laundering and counter financing of terrorism (AML/CFT) supervision report.

HM Treasury is responsible for appointing AML/CFT supervisors and for the Regulations which set out the role of the supervisors and gives them powers to effectively monitor their respective sectors. The supervisors that HM Treasury has appointed are a diverse group including large global professional bodies, smaller professional bodies and a number of public sector organisations.

The report that HM Treasury has published follows a similar framework to previous reports, placing a focus on providing both quantitative and qualitative data. The report also provides a number of case studies of good practice by individual supervisors as they rise to the challenges set by the Financial Action Task Force (FATF) to better focus their efforts on demonstrating that they supervise in accordance with a risk-based approach and that this supervision is effective and proportionate.

Amongst other things, the report notes that:

  • although implementation of the risk-based approach varies, supervisors demonstrate a high level of awareness of the requirement to, and importance of, taking a risk-based approach to their AML/CFT supervision;
  • there was a slight decrease in the number of desk-based reviews and visits undertaken in 2013-14 compared to the previous reporting period;
  • there has been a significant increase in enforcement activity undertaken by supervisors in 2013-14, compared to the previous reporting period;
  • both the FATF effectiveness methodology and the Regulators’ Compliance Code expect supervisors to provide both general and targeted information and practical advice in a range of formats to the firms they supervise; and
  • an effective AML/CFT regime requires supervisors to communicate and share information with each other.

HM Treasury will continue to work with supervisors to enhance the proportionality and effectiveness of the AML/CFT regime, and welcomes feedback on the report and on the UK’s AML/CFT regime.

View Anti-money laundering and counter terrorist finance supervision report 2013-14, 24 March 2015