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UK Government publishes consultation on MLRs

HM Treasury has published a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’)

The UK government’s proposal to enhance the efficacy of anti-money laundering (AML) regulations. It begins by acknowledging the importance of robust AML measures in combating financial crime and ensuring the integrity of the financial system.

The consultation identifies several key areas for improvement:

  • Strengthening Supervisory Oversight: It emphasises the need for more effective supervision of regulated entities, including banks, financial institutions, and professional service providers, to ensure compliance with AML regulations. This may involve enhancing the resources and capabilities of supervisory bodies to detect and address instances of non-compliance.

 

  • Enhancing Risk Assessment: The consultation proposes refining the risk assessment process to better identify and mitigate money laundering risks. This could involve adopting a more dynamic and risk-based approach, tailored to the specific characteristics of different sectors and entities.

 

  • Improving Information Sharing: There is a recognition of the importance of information sharing among relevant authorities and regulated entities to facilitate the detection and prevention of money laundering activities. The consultation seeks input on how to improve the effectiveness and efficiency of information sharing mechanisms while ensuring data protection and privacy.

 

  • Strengthening Customer Due Diligence (CDD) Requirements: The document suggests enhancing CDD requirements to ensure that regulated entities have a thorough understanding of their customers’ identities and financial activities. This may involve clarifying and updating CDD standards and procedures to reflect evolving money laundering risks and regulatory expectations.

 

  • Enhancing Technology and Innovation: The consultation acknowledges the potential of technology and innovation to improve AML compliance, such as using advanced data analytics and artificial intelligence. It seeks input on how regulatory frameworks can support the responsible adoption of technology while addressing potential risks and challenges.

Throughout the consultation, there is an emphasis on the importance of stakeholder engagement and feedback in shaping future AML policies and regulations. The UK government invites responses from a wide range of stakeholders, including regulated entities, industry associations, law enforcement agencies, and civil society organisations, to inform the development of more effective AML measures.

Read the full consultation here.

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