Laying the (shaky) foundations

No-one who has heard me speak or read my blog will be surprised to hear that I am a devout Remainer.  As someone whose parents had vivid memories of (and occasional nightmares about) the Second World War and its aftermath, I was daily grateful for the stability provided by belonging to the EU.  As we prepare to cast ourselves adrift from that, I have to – alongside my personal decisions – prepare for a professional life outside the EU, when the UK is no longer obliged to comply with the Money Laundering Directives.

And the UK government seems to have taken its first step in this direction.  On 19 October 2017 the draft Sanctions and Anti-Money Laundering Bill was launched on its legislative voyage.  The purpose of this is to give the UK government – whoever they might be at the point of Brexit – authority to put in place sanctions and AML legislation.  The Bill does not give details of what that AML legislation might look like, although Schedule 2 lists – in sixteen paragraphs – all the things that could happen (e.g. “Require prescribed persons to identify and assess risks relating to money laundering, terrorist financing and other threats to the integrity of the international financial system” and “Require prescribed persons to take prescribed measures in relation to their customers in prescribed circumstances” – prescription will obviously be a Big Thing in our post-Brexit world).

I’m not a lawyer, so what I can’t quite tell is what the wording “make provision for” actually means, as in “Make provision for and in connection with the creation, production and retention of registers and records, including registers of people with significant control and registers and records relating to the beneficial ownership of prescribed entities, trusts or other arrangements”.  Could “make provision for” mean “decide not to do at all”?  Or does it suggest that at least something must be done?  I’m also rather taken with the idea of a supervisory authority being authorised to publish “statements of censure” – they sound so much more Dickensian than our current Final Notices.

(And I am slightly mollified – as in “I told you so” – to read in the Interpretation to Schedule 2 that “‘Money Laundering Regulations 2017’ means the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017”.  So why not just call them that and be done with it?  Pah!)

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4 Responses to Laying the (shaky) foundations

  1. CDWOS says:

    Presumably based upon what you say you (the UK) will be truly back in the world of having to meet all FATF/IMF/MoneyVal standards and be evaluated upon their “effectiveness” very much as a stand alone sovereign state with no implied cover from the rafts of EU AML legislation, that as we know only too well down south will bring all the delights and joys of having to actively defend what you do and how and why. Effectiveness does seem as though at the national level it may be quite tricky to prove without locking legions of individuals for misdemeanours thereby evidencing the power and effectiveness of your laws. Not a pleasant prospect……………interesting concept (but not a pleasant thought) that “registered role” holders (our term, yours is probably ‘approved’) are being given less and less latitude for genuine ‘human error’ as the roles become more and more criminalised.

  2. David Winch says:

    The MLR 2017 were made “in exercise of the powers conferred by section 2(2)” of the European Communities Act 1972. Come Brexit the 1972 Act will be repealed & so the authority for MLR 2017 (arguably) evaporates. Hence the need for a new statute to permit corresponding ML Regs to be made. But I think the intention is simply to put us post-Brexit in the same position as we were pre-Brexit as far as ML Regs are concerned.
    But we will then be looking to FATF etc rather than EU ML Directives.

  3. Indeed, David – and at many points FATF is less demanding than EU. Whether this is a good or bad development for AML depends on where you stand – I think everyone can guess my view!

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