The lovely film “Out of Africa” contains one of my favourite cinematic lines of all time. No, it’s not a declaration of love from mahogany Rob to multi-accented Meryl, but rather the response from her dastardly soon-to-be-ex-husband, the splendidly-named Baron Bror Blixen, when she says that she will have to accuse him of something if he wants a divorce: “Whatever: I have surely done it.” It is good to know not only one’s limitations but also one’s failings, and two jurisdictions recently have been through an AML baring of the soul.
At the beginning of October, the head of the AML Unit of the Attorney-General’s Chambers in the Cayman Islands announced that their national AML risk assessment had revealed all sorts of shortcomings. Francis Arana spoke frankly to compliance professionals at a conference in Grand Cayman: “We have outdated anti-money laundering, terrorism financing laws that are in urgent need of updating. The way that the laws, regulations and guidance were structured did not anticipate the high level of interagency cooperation and coordination [and as a result] government agencies are operating in silos.” He lamented the level of AML supervision in his jurisdiction: “We have inadequate supervision at this time, especially for designated non-financial businesses and professions and non-profit organisations – I think this is a big vulnerability.” In a bid for absolution (and perhaps with an eye on a visit from the AML deities in the form of the Caribbean FATF in early 2017) the Cayman Islands government now has an action plan for updating the legislation and putting place adequate supervision, as well as dealing with beneficial ownership and establishing greater enforcement powers.
And the UK’s own national risk assessment, published only days after the Cayman conference, exhibits similar candour. Earlier posts (here and here) have discussed specific points raised, but the tone of the whole assessment is one of confession. And again, action is promised, with priorities including “plugging intelligence gaps”, “reforming the suspicious activity reports (SARs) regime, and upgrading the capabilities of the UK Financial Intelligence Unit (UKFIU)”, “addressing the inconsistencies in the supervisory regime” and “transforming information sharing”. The UK’s next mutual evaluation visit by the FATF is tentatively scheduled for March 2018, and of course MLD4 changes must be transposed into UK legislation before then, so, confession over, HMT and others will have to scramble up from their knees pretty sharpish and get busy.