By PAUL O’DONOGHUE, Senior Correspondent
THE UK is strengthening its anti-money laundering (AML) regime as it prepares for its next Financial Action Task Force (FATF) evaluation, according to the 2023-24 AML Supervision Report.
Published by HM Treasury (HMRC), the report outlines efforts by the UK’s 25 AML and counter-terrorist financing (CTF) supervisors to improve standards. It details measures aimed at improving supervision and securing a positive FATF assessment.
“The FATF has begun its fifth round of assessments. As part of this, the UK will undergo an in-depth evaluation, resulting in a new Mutual Evaluation Review,” the report stated.
UK metrics emphasize FATF effectiveness
The UK’s evaluation is scheduled for publication in 2028. It will assess both technical compliance with FATF’s 40 Recommendations and the effectiveness of AML, CTF, and counter-proliferation financing (CPF) measures.
To enhance supervision, HM Treasury introduced new performance metrics during the 2023-24 reporting period. These metrics, developed with input from supervisors and the National Crime Agency, align with FATF methodology.
“This reflected our commitment to developing a framework to better evaluate the effectiveness of AML/CTF supervision,” the report said. “The additional metrics will include data required for the UK’s next Mutual Evaluation Report (MER).”
FATF’s updated assessment approach will emphasize effectiveness, risk, and context. It will also evaluate financial institutions and virtual asset service providers separately from non-financial businesses and professions.
“This will provide a clearer overview of the level of effectiveness of supervision in these distinct areas, and stronger and more targeted recommendations for improvement,” the report added.
Risk assessments
HM Treasury continues to use FATF reports to assess risks across different sectors. These assessments also incorporate findings from investigations and insights from experienced staff.
“As a leading FATF member, the government welcomes a renewed international focus on supervision effectiveness and expects supervisors to demonstrate full compliance with required standards,” the report said.
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
