On 8 March 2019, the Treasury Select Committee published a report on anti-money laundering (AML) supervision and sanctions implementations. The report follows the Treasury Select Committee’s March 2018 enquiry on the scale of money laundering, terrorist financing and sanctions in the UK, the UK’s regulatory and legislative landscape, and how individuals, firms and the wider economy have been impacted by these regimes and the implementation of them.
Following a review of the enquiry, the Select Committee makes a number of conclusions and recommendations, including:
- the Government should retain, or replicate, the arrangements with the EU to maintain the flow of information to UK law enforcement agencies on economic crime post-Brexit. The Select Committee recommends that the Government work to develop strong relationships with other countries and strengthen mutual information sharing and law enforcement powers;
- the Government should institute a more frequent system of public review of the UK’s AML supervision, and law enforcement, that will ensure a constant stimulus to improvement and reform – this may be a role for the recently announced Economic Crime Strategic Board;
- if it is to retain its AML supervisory responsibilities, HM Revenue & Customs (HMRC) should:
- include within its departmental objectives a single stand-alone objective related to its AML supervisory work; and
- keep a clear reporting line between its AML supervisory work and its work investigating tax crime and associated money laundering offences. HMRC should have a separate strategy for its AML supervisory work which would include key performance indicators on which HMRC can report.
- legislative reform is required to strengthen the hand of law enforcement in the fight against economic crime. The Select Committee recommends that the Government sets out a timetable for bringing forward legislation to improve the enforcement of corporate liability for economic crime; and
- the Economic Secretary has suggested that there should be a power for the Government to block a listing on national security grounds. If the Government wishes to pursue this reform, it needs to set out clearly when such a power would be used, what effect it might have on UK listings and financial services, and why it would be needed, especially when sanctions are in the full control of the UK post-Brexit. A full consultation on such a power would be expected.