In an effort to step up the fight against economic crime, the U.K. government is giving the Financial Conduct Authority (FCA) a greater role in the fight against money laundering.
On Tuesday, the HM Treasury announced its plans for reforming the anti-money laundering (AML) regime, including its decision to give the FCA added responsibility for supervising compliance by professional services firms with the AML rules — a move that streamlines the existing regime, which includes a variety of different supervisors, complicating oversight and enforcement.
In a paper detailing its proposals, the U.K. government said it’s “determined to address these deficiencies” and to simplify compliance to “both strengthen the U.K.’s defences against illicit finance and simplify a complex regulatory system.”
“These changes will simplify the supervision of professional services, ensure more consistent oversight and help us identify and disrupt crime,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA, in a release.
“The new regime will create enhanced opportunities for collaboration with key partners, including law enforcement, to tackle money laundering,” he added.
The reform comes in the wake of a new report from the FCA that flagged weaknesses in compliance with the AML requirements by corporate finance firms. Among other things, the regulator found that two-thirds of these firms “may be falling short” of complying with the money laundering rules.
These shortcomings included firms failing to conduct business-wide risk assessments, firms that failed to carry out financial crime assessments of their own personnel, a lack of documented customer due diligence, and firms not monitoring their reps’ compliance with financial crime regulations.
“While some firms may be meeting expectations, many may be falling short of minimum regulatory requirements,” said Andrea Bowe, director of the specialist directorate at the FCA, in a release.