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Sanctions:
As a member of the EU, the country is party to all EU Sanctions
as well as UN sanctions.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
Extract from IMF Report - United Kingdom: Anti-Money
Laundering/Combating the Financing of Terrorism
(August 2011)
Money Laundering and Terrorism Finance Situation
The MER indicates that the overall threat to the United Kingdom
from serious organized crime and related money laundering was
high. The U.K. law enforcement hasestimated that the economic
and social costs of serious organized crime, including the costs
of combating it, at upwards of £20 billion a year. The total
quantified organized crime market in the United Kingdom was
reportedly worth about £15 billion per year as follows:
drugs (50 percent); excise fraud (25 percent); fraud (12 percent);
counterfeiting (7 percent); and organized immigration crime (6
percent).
Estimated total recoverable criminal assets per annum at the time
were £4.75 billion, of which it was estimated that £2.75 billion was
sent overseas. According to the assessment, cash remained the
mainstay of most serious organized criminal activity in the United
Kingdom
At the time of the assessment, the following typologies were of
most concern to U.K. law enforcement: cash/value couriering;
financial abuse through certain nonfinancial businesses and
professions, as well as through money transmission agents
(including Hawala and other alternative remittance systems); cash-
rich businesses and front companies; high-value assets and
property; abuse of bank accounts, and other over-the-counter
financial sector products.
The United Kingdom has had substantial experience responding
to terrorist threats and addressing the support networks that
make terrorist acts possible. The principal terrorist threat facing
the United Kingdom identified in the assessment was from
Islamic extremists. Attacks have been carried out in Britain by both
British nationals and by outsiders. The use of banks to move
terrorist funds overseas was thought to have declined in
response to the tightening of controls in that sector. Two areas
that were identified in the assessment as being of growing
concern were the abuse of charitable organizations to raise
and distribute funds, and the abuse through money service
business (MSB) sector (including alternative remittance services)
to move funds.
AML/CFT Strategies and Priorities
According to the assessment, the United Kingdom was committed
to identifying and interdicting the flow of illicit funds across and
within its borders, and to the disruption and dismantling of the
money laundering and terrorist finance networks that move such
funds. This was made clear in the government’s Anti Money
Laundering Strategy, published in October 2004. The government’
s policies for AML/CFT were underpinned by three key objectives:
to deter, through the establishment of enforceable safeguards
and supervision; to detect, using the financial intelligence
generated by money laundering controls to identify and target
criminals and terrorist financiers; and to disrupt, maximizing the
use of available penalties such as prosecutions or asset
seizures.
As of the 2007 MER, the United Kingdom’s priorities were: the
domestic implementation of the Third EU Money Laundering
Directive, and the adoption of appropriate domestic controls
derived from the payments regulation and the mandatory
declaration of currency regulation; reform of the “suspicious
activity reporting” framework further to a comprehensive analysis
of its current effectiveness (the Lander Review);
development of an enhanced regulatory environment for MSBs
based on a domestic assessment of their significance in
facilitating ML and TF; an assessment of the extent to which
current controls for charitable organizations are fit for purpose in
respect of TF; the European Commission’s 2005 “Communication”
on this topic and domestic intelligence assessments; and
measures to further restrict couriering cash through the
implementation of a new set of European controls.
The United Kingdom’s annual threat assessment on serious and
organized crime included a section on ML that analyzed the
effectiveness of the United Kingdom’s controls in meeting the
threat and identified areas for improvement. Law enforcement
and the wider AML/CFT community contributed to the
development of these threat assessments. At the time of the FATF
on-site visit, a joint Treasury–Home Office–SOCA exercise was
underway to map and define U.K. strategy on ML and FT for the
future. This AML/CFT strategy was published on February 28,
2007.
Legal and Institutional AML/CFT Framework
According to the MER, the United Kingdom had a comprehensive
legal structure to combat ML and TF. The ML offense was broad,
fully covering the elements of the Vienna and Palermo
Conventions, and the number of prosecutions and convictions was
increasing. The TF offense was also broad. The introduction of
the Proceeds of Crime Act 2002 (POCA) had a significant and
positive impact on the United Kingdom’s ability to restrain,
confiscate, and recover proceeds of crime. The United Kingdom
also established an effective terrorist asset-freezing regime.
Overall, the U.K. Financial Intelligence Unit (FIU) appeared to be
generally effective. The United Kingdom also designated a
number of competent authorities to investigate and prosecute ML
and TF offenses. Measures for domestic and international
cooperation were generally comprehensive.
All types of “financial institutions” as defined in the FATF
Recommendations are active in the United Kingdom and all are
covered by the MLRs. The United Kingdom is a major
international center for investment and private banking and had
one of the largest commercial banking sectors in the world. The
U.K. insurance industry is the largest in Europe and third largest
in the world. The United Kingdom is also one of the largest fund-
management markets in the world. It has a strong international
orientation and attracted significant overseas funds (an estimate
of the U.K. funds management industry at the end of 2004 was
that over £2,960 billion of funds were under management, which
included international private wealth management, hedge funds,
and private equity).
According to the assessment, the effectiveness of preventive
measures for financial institutions varied, but the situation was
expected to improve with the implementation of the Third EU
Money Laundering Directive later in 2007. As identified in the
MER, the main customer-due-diligence (CDD) deficiencies were
that the identification and verification of the identity of beneficial
owners of accounts were not required by law or regulation.
Record-keeping and suspicious transaction (or activity)
reporting requirements were viewed as comprehensive and
effective; however, the Financial Services Authority (FSA) had
extensive powers to monitor and ensure compliance by the
financial institutions it regulated. While the assessment viewed the
supervisory system as comprehensive for larger firms, supervision
of certain smaller firms (including some small banks, insurance
companies, securities dealers, and investment managers) was
thought to require enhancement. In response to these findings,
the FSA commenced a project looking at AML/CFT systems and
controls in small firms: 159 small firms were selected across the
wholesale and retail sectors, and a report was published in May
2010. In addition, the FSA’s Financial Crime Operations Team
now routinely visits small firms as part of its case work
and ongoing thematic work, and has visited a total of 337 firms
from 2007 to 2010.
All types of DNFBPs, as defined in the FATF Recommendations,
are active in the United Kingdom and all are covered by the
MLRs. The DNFBPs appeared to be effectively complying with
their STR obligations. There was generally comprehensive
monitoring of casinos, lawyers, and certain accountants; the main
deficiencies identified in the assessment were the lack of
AML/CFT supervision for the real estate and company service
provider sectors and certain unregulated accountants.
The United Kingdom has a wide range of legal persons and
arrangements. Legal forms include: Companies Act companies
and other forms of companies (both public and private),
partnerships, and societies. Trusts are a longstanding, popular,
and integral part of the legal and economic landscape of the
United Kingdom.
To view full report click here
____________________________________________________
US State Department Money Laundering Report - 2012:
The United Kingdom (UK) plays a leading role in European and
world finance and remains attractive to money launderers
because of the size, sophistication, and reputation of its financial
markets. Although narcotics are still a major source of illegal
proceeds for money laundering, the proceeds of other offenses,
such as financial fraud and the smuggling of people and goods,
have become increasingly important. The past few years have
seen an increase in the movement of cash via the non-bank
financial system, as banks and mainstream financial institutions
have tightened their controls and increased their vigilance. The
use of bureau de change, cash smugglers (into and out of the
UK), and traditional gatekeepers (including solicitors and
accountants) to move and launder criminal proceeds has been
increasing. Also on the rise are credit/debit card fraud, use of the
internet for fraud, and the purchase of high-value assets to
disguise illegally obtained money.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All crimes approach
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
KYC covered entities: Banks, credit unions, building societies,
emoney issuers, and credit institutions; insurance companies;
securities and investment service providers and firms;
independent legal professionals, auditors, accountants, tax
advisors, and insolvency practitioners; estate agents; casinos;
high value goods dealers; and trust or company service providers
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 240,582 October 1,
2009 – September 30, 2010
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks, credit unions, building societies,
emoney issuers, and credit institutions; insurance companies;
securities and investment service providers and firms;
independent legal professionals, auditors, accountants, tax
advisors, and insolvency practitioners; estate agents; casinos;
high value goods dealers; and trust or company service providers
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 2,439 in 2009
Convictions: 1,411 in 2009
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
The United Kingdom is a member of the Financial Action Task
Force (FATF). Its most recent mutual evaluation can be found
here: http://www.fatf-gafi.org/infobycountry/0,3380,
en_32250379_32236963_1_70432_1_1_1,00.html
Enforcement and implementation issues and comments:
The United Kingdom has a comprehensive range of anti-money
laundering/countering the financing of terrorism (AML/CFT) laws.
It is an active participant in multilateral efforts to meet AML/CFT
threats. The UK engages in efforts to freeze the assets of
persons who commit terrorist acts, and its legislative framework
relies on “reasonable belief” rather than “reasonable suspicion”
as the burden of proof for freezing assets. The UK continuously
reviews and assesses the effectiveness and proportionality of its
AML/CFT regime – including through the approval of updated and
more accessible industry guidance. In order to improve the regime
further, and based on the responses in a recent industry
consultation, the UK plans to announce proposals to improve
guidance and will publish these towards the end of the year.
The Financial Services Authority, which supervises firms for
compliance with their legal and regulatory obligations, including
those related to politically exposed persons (PEPs), will be
merged with the Bank of England at the end of 2012. Also, the
Serious Organized Crime Agency, which includes the UK financial
intelligence unit, will transition to the National Crime Agency by
2013. It is important that these changes not impede the UK’s
AML/CFT efforts.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
The United Kingdom of Great Britain and Northern Ireland (UK) is
a consumer country of illicit drugs. Like other developed nations,
the UK faces a serious domestic drug problem. Crime syndicates
from around the world exploit the illegal narcotics market and use
the UK as a major transshipping route.
The Home Office reported 8.8 percent of 16 to 69 year olds in
England and Wales, or about 2.9 million people, used illicit drugs
in 2010/2011. This rate is the lowest since measurement began in
1996 and is mainly due to a long-term decline in the use of
cannabis. The UK has a robust drug-control institutional capability
and strictly enforces national precursor chemical legislation in
compliance with EU regulations. The UK is a party to the 1988 UN
Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 1)
The United Kingdom (UK) is a destination country for men,
women, and children primarily from Africa, Asia, and Eastern
Europe who are subjected to sex trafficking and forced labor,
including forced domestic service. Unaccompanied children in the
UK represent an especially vulnerable group for trafficking. Some
UK children are subjected to sex trafficking within the country, and
some foreign unaccompanied children continue to be forced to
beg or steal. Some migrant workers are subjected to forced labor
in agriculture, construction, food processing, domestic service,
and food services. Some domestic workers reportedly are
subjected to forced labor by diplomats in the UK; there are
concerns that these diplomatic employers are often immune from
prosecution. Some children, mostly from Vietnam and China,
continued to be subjected to debt bondage by Vietnamese
organized crime gangs for forced work on cannabis farms. NGOs
providing assistance to trafficked women reported a considerable
increase in referrals of Ugandan nationals in 2010; Nigerian
nationals remain one of the highest percentages of referrals. A
recent study conducted by the Association of Chief Police Officers
found that a large percentage of women forced into prostitution in
England and Wales come from China.
The Government of the United Kingdom fully complies with the
minimum standards for the elimination of trafficking. The
government demonstrated vigorous prosecutions and convictions
of sex trafficking offenders in England, obtaining during the
reporting period the highest sentence on record for trafficking in
the United Kingdom. The UK government improved its
prosecution of forced labor offenses and continued to implement
its National Referral Mechanism (NRM). NGOs, however,
continued to report inadequate and inconsistent protection efforts
for trafficking victims in the UK. Some potential and confirmed
trafficking victims, including children, were prosecuted and
imprisoned for committing offenses as a direct result of being
trafficked. Due to devolution of law enforcement powers to
Northern Ireland, Wales, and especially Scotland, each region
has its own human trafficking laws and anti-trafficking
enforcement powers. Inadequate protection measures for victims
in Northern Ireland, Scotland, and Wales could result in their re-
trafficking throughout the Kingdom and the Republic of Ireland.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The UK continued to play a leading role in global
counterterrorism efforts. The new coalition government
established a National Security Council; appointed a National
Security Adviser; completed a Strategic Defense and Security
Review (SDSR); and published a new National Security Strategy
(NSS). The SDSR and NSS reviewed threats to the UK's national
security and set out new measures to counter terrorism.
The British government began a review of counterterrorism
legislation, measures, and programs with an aim toward balancing
liberty and security. In January, the United Kingdom (UK) raised
its national threat level to the UK from international terrorism from
substantial to severe, meaning that a terrorist attack was highly
likely. In September, the UK published for the first time its threat
levels from Irish-related terrorism: severe in Northern Ireland,
substantial in mainland Britain.
2010 Terrorist Incidents: Throughout the year, dissident
republican groups operating in Northern Ireland stepped up their
campaigns of terrorism. The Police Service of Northern Ireland
(PSNI) reported that between January and November, there were
two deaths related to Northern Ireland's security situation, 79
shooting incidents, 87 bombing incidents, 54 casualties resulting
from paramilitary-style assaults, and 36 casualties resulting from
paramilitary-style shootings. The PSNI estimated a rise of more
than 80 percent in bombing incidents in Northern Ireland between
January and November compared with 2009. Examples of
incidents included:
On October 29, UK police and security services intercepted an
explosive device concealed in a computer printer toner cartridge
aboard a cargo aircraft at East Midlands Airport in Leicestershire
bound for Chicago, believed to have originated in Yemen. The
investigation into the "cargo bomb plot" was ongoing through the
end of the year, but Home Secretary Theresa May indicated to
Parliament in November that the UK government believed al-
Qa'ida in the Arabian Peninsula was responsible.
Legislation and Law Enforcement: In April in NI, policing and
justice powers were fully transferred from the UK government in
London to NI. In November, the Independent Monitoring
Commission, a four-commissioner team established by the British
and Irish governments in 2004 to support devolution by reporting
on paramilitary activity and security, indicated in its annual report
that dissidents in Northern Ireland had "steadily increased the
number of improvised explosive devises they deployed and the
proportion of those that detonated."
In June, Home Secretary Theresa May extended for six months
the government's power to hold terrorist suspects for 28 days in
pre-charge detention. The provision must be renewed annually or
it expires, and May indicated that the government believed the
provision should only be temporary. The following month, May
announced a broad review of the government's counterterrorism
legislation, measures, and programs, and indicated that the pre-
charge detention provision would be part of that review. The
review also considered the utility of the UK's heavily-debated
"control orders." The Prevention of Terrorism Act 2005 empowers
the Home Secretary to issue control orders "impos[ing] obligations
on [an individual] for purposes connected with protecting
members of the public from a risk of terrorism." In practice, control
orders have been used to impose near-house arrest and restrict
movement and access to the Internet by terrorism suspects who
cannot be prosecuted or deported. In undertaking the review, the
government cited the need to balance security and civil liberties.
In July, the European Court of Human Rights issued a preliminary
ruling blocking the extradition from the UK to the United States of
British terrorism suspects Abu Hamza, Babar Ahmad, Seyla Talha
Ahsan, and Haroon Rashid Aswat over concerns that the
sentences and prison conditions the men could face if convicted
in the United States could violate the European Convention on
Human Rights. The court asked the UK government to submit
further information on these cases. In November, Abu Hamza
successfully appealed the government's attempts to strip him of
his UK passport.
In July, three men were sentenced to life in prison for their
involvement in a 2006 plot to detonate homemade liquid
explosives on transatlantic flights. Ibrahim Savant, Arafat Waheed
Khan, and Waheed Zaman, who had previously been cleared of
involvement in the plot, were found guilty at a retrial of conspiracy
to murder. The men were told by the judge that they would serve
minimum terms of 20 years.
In response to a decision by the European Court of Human
Rights, which found that the UK's police use of stop-and-search
powers under Section 44 of the Terrorism Act 2000 were drawn
too broadly and failed to protect civil liberties, the Home Secretary
announced in July that police would need to rely on Section 43 of
the Act, which requires officers to "reasonably suspect [the
person] to be a terrorist" before subjecting them to a search.
Police retained the authority to search vehicles under Section 44,
provided they had reasonable suspicion of terrorist activity.
In October, High Court Judge Lady Justice Hallett opened an
inquest into the July 2005 terrorist attacks on London's transport
network that left 52 people dead. The inquest will investigate,
among other things, whether the security services could have
prevented the 2005 attacks. The inquest continued at year's end.
In November, in response to the cargo bomb plot, the government
announced a review of airfreight security, imposed temporary
restrictions on the transport of large printer cartridges by air, and
suspended the transport of unaccompanied airfreight from Yemen
and Somalia. The move followed a January decision by the
government to suspend all direct flights between the UK and
Yemen as part of increased security measures after the
attempted Christmas Day 2009 terrorist attack on Northwest Flight
253. After the cargo bomb plot was discovered, the government
began working closely with the aviation industry to devise a long-
term security screening regime for cargo to mitigate the threats
the plot revealed. On December 20, UK police indicated that 12
men between the ages of 17 and 28 were detained on suspicion
of the commission, preparation, or instigation of an act of
terrorism in the UK. On December 27, nine of the 12 men
arrested were charged with conspiracy to cause explosions and
preparing acts of terrorism against targets in the UK, allegedly
including the U.S. Embassy.
London's Metropolitan Police Service launched an "If You Suspect
It, Report It" awareness campaign in December to enlist public
support in identifying suspicious activity related to acts of
terrorism.
Countering Terrorist Finance: The UK has a comprehensive
range of laws aimed at anti-money laundering and counterterrorist
financing (AML/CTF). It is a member of the Financial Action Task
Force (FATF) and an active participant in FATF-style regional
bodies to meet evolving anti-money laundering and
counterterrorism financing threats. The UK engages in efforts to
freeze the assets of persons who commit terrorist acts, as
required by the UN, including through implementation of UNSCRs
1267 and 1373. In January, the UK Supreme Court held that the
government had earlier exceeded its authority by imposing asset-
freezing orders that went beyond the requirements of UNSCR
1373. The Supreme Court reinstated temporary asset-freezing
regulations as an interim measure following the judgment. In
December, the UK replaced the temporary provisions with a new
legislative framework that contained a higher standard of proof for
freezing assets; “reasonable belief” rather than “reasonable
suspicion.” The legislation was awaiting Royal Assent to enact it at
year's end.
To further improve and update Bermuda's anti-money laundering
and anti-terrorist financing regulations, in August, Bermuda's
Parliament enacted the Proceeds of Crime Regulations
(Supervision and Enforcement) Amendment Act that would require
the Bermuda Bar Association and the Chartered Accountants in
Bermuda to establish jointly a board to regulate law and
accountancy firms in order to prevent money laundering and
terrorist financing.
Regional and International Cooperation: The UK cooperates with
other nations and international organizations to counter terrorism,
including in the UN, UNSC, EU, Commonwealth, NATO, Council of
Europe, G8, International Atomic Energy Agency, IMF-World
Bank, the Global Initiative to Combat Nuclear Terrorism, and
Interpol. In January, the UK hosted a conference on Afghanistan
that brought over 75 nations and multilateral organizations
together to pledge international support for Afghan-led
reintegration of former insurgents and transition of full security
responsibility to the Afghan leadership. In January, the UK hosted
a Friends of Yemen conference in London, which brought
together representatives from the Gulf Cooperation Council, G8,
UN, EU, Arab League, IMF, World Bank, and other European
nations to coordinate international engagement and support for
Yemen's efforts to deliver unity, security, and stability. The UK
signed the Beijing Convention on the Suppression of Unlawful
Acts Relating to International Civil Aviation and the Protocol to the
Convention for the Suppression of Unlawful Seizure of Aircraft at
the conclusion of an International Civil Aviation Organization
diplomatic conference in September.
Countering Radicalization and Violent Extremism: The UK's
"Prevent" strategy, launched in 2007 to counter radicalization,
outlined a number of objectives, such as support to mainstream
voices and increasing community resilience, and involved a range
of government actors, particularly the Home Office, The Foreign
and Commonwealth Office, the Department of Communities and
Local Government, local authorities, and the police. Many of the
programs have been run by community organizations, supported
by government funding. Examples of Prevent programs include
interfaith activities, diversionary programs for youth, professional
development for mainstream community and faith leaders,
speaking tours by mainstream Islamic scholars, imam training
programs, and projects to equip young people with arguments to
counter violent extremism. The Research, Information,
Communications Unit (RICU), which is physically located in the
Home Office, has been responsible for managing
counterterrorism communications, including those related to
Prevent. The Coalition government has initiated a review of the
strategy "to more clearly separate work on preventing violent
extremism from work to promote integration," which will determine
the future direction of counter-radicalization programs in the UK.
____________________________________________________
Links:
Serious Organised Crime Agency (SOCA)
Worldwide AML Legislation (International Bar Association)
As a member of the EU, the country is party to all EU Sanctions
as well as UN sanctions.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
Extract from IMF Report - United Kingdom: Anti-Money
Laundering/Combating the Financing of Terrorism
(August 2011)
Money Laundering and Terrorism Finance Situation
The MER indicates that the overall threat to the United Kingdom
from serious organized crime and related money laundering was
high. The U.K. law enforcement hasestimated that the economic
and social costs of serious organized crime, including the costs
of combating it, at upwards of £20 billion a year. The total
quantified organized crime market in the United Kingdom was
reportedly worth about £15 billion per year as follows:
drugs (50 percent); excise fraud (25 percent); fraud (12 percent);
counterfeiting (7 percent); and organized immigration crime (6
percent).
Estimated total recoverable criminal assets per annum at the time
were £4.75 billion, of which it was estimated that £2.75 billion was
sent overseas. According to the assessment, cash remained the
mainstay of most serious organized criminal activity in the United
Kingdom
At the time of the assessment, the following typologies were of
most concern to U.K. law enforcement: cash/value couriering;
financial abuse through certain nonfinancial businesses and
professions, as well as through money transmission agents
(including Hawala and other alternative remittance systems); cash-
rich businesses and front companies; high-value assets and
property; abuse of bank accounts, and other over-the-counter
financial sector products.
The United Kingdom has had substantial experience responding
to terrorist threats and addressing the support networks that
make terrorist acts possible. The principal terrorist threat facing
the United Kingdom identified in the assessment was from
Islamic extremists. Attacks have been carried out in Britain by both
British nationals and by outsiders. The use of banks to move
terrorist funds overseas was thought to have declined in
response to the tightening of controls in that sector. Two areas
that were identified in the assessment as being of growing
concern were the abuse of charitable organizations to raise
and distribute funds, and the abuse through money service
business (MSB) sector (including alternative remittance services)
to move funds.
AML/CFT Strategies and Priorities
According to the assessment, the United Kingdom was committed
to identifying and interdicting the flow of illicit funds across and
within its borders, and to the disruption and dismantling of the
money laundering and terrorist finance networks that move such
funds. This was made clear in the government’s Anti Money
Laundering Strategy, published in October 2004. The government’
s policies for AML/CFT were underpinned by three key objectives:
to deter, through the establishment of enforceable safeguards
and supervision; to detect, using the financial intelligence
generated by money laundering controls to identify and target
criminals and terrorist financiers; and to disrupt, maximizing the
use of available penalties such as prosecutions or asset
seizures.
As of the 2007 MER, the United Kingdom’s priorities were: the
domestic implementation of the Third EU Money Laundering
Directive, and the adoption of appropriate domestic controls
derived from the payments regulation and the mandatory
declaration of currency regulation; reform of the “suspicious
activity reporting” framework further to a comprehensive analysis
of its current effectiveness (the Lander Review);
development of an enhanced regulatory environment for MSBs
based on a domestic assessment of their significance in
facilitating ML and TF; an assessment of the extent to which
current controls for charitable organizations are fit for purpose in
respect of TF; the European Commission’s 2005 “Communication”
on this topic and domestic intelligence assessments; and
measures to further restrict couriering cash through the
implementation of a new set of European controls.
The United Kingdom’s annual threat assessment on serious and
organized crime included a section on ML that analyzed the
effectiveness of the United Kingdom’s controls in meeting the
threat and identified areas for improvement. Law enforcement
and the wider AML/CFT community contributed to the
development of these threat assessments. At the time of the FATF
on-site visit, a joint Treasury–Home Office–SOCA exercise was
underway to map and define U.K. strategy on ML and FT for the
future. This AML/CFT strategy was published on February 28,
2007.
Legal and Institutional AML/CFT Framework
According to the MER, the United Kingdom had a comprehensive
legal structure to combat ML and TF. The ML offense was broad,
fully covering the elements of the Vienna and Palermo
Conventions, and the number of prosecutions and convictions was
increasing. The TF offense was also broad. The introduction of
the Proceeds of Crime Act 2002 (POCA) had a significant and
positive impact on the United Kingdom’s ability to restrain,
confiscate, and recover proceeds of crime. The United Kingdom
also established an effective terrorist asset-freezing regime.
Overall, the U.K. Financial Intelligence Unit (FIU) appeared to be
generally effective. The United Kingdom also designated a
number of competent authorities to investigate and prosecute ML
and TF offenses. Measures for domestic and international
cooperation were generally comprehensive.
All types of “financial institutions” as defined in the FATF
Recommendations are active in the United Kingdom and all are
covered by the MLRs. The United Kingdom is a major
international center for investment and private banking and had
one of the largest commercial banking sectors in the world. The
U.K. insurance industry is the largest in Europe and third largest
in the world. The United Kingdom is also one of the largest fund-
management markets in the world. It has a strong international
orientation and attracted significant overseas funds (an estimate
of the U.K. funds management industry at the end of 2004 was
that over £2,960 billion of funds were under management, which
included international private wealth management, hedge funds,
and private equity).
According to the assessment, the effectiveness of preventive
measures for financial institutions varied, but the situation was
expected to improve with the implementation of the Third EU
Money Laundering Directive later in 2007. As identified in the
MER, the main customer-due-diligence (CDD) deficiencies were
that the identification and verification of the identity of beneficial
owners of accounts were not required by law or regulation.
Record-keeping and suspicious transaction (or activity)
reporting requirements were viewed as comprehensive and
effective; however, the Financial Services Authority (FSA) had
extensive powers to monitor and ensure compliance by the
financial institutions it regulated. While the assessment viewed the
supervisory system as comprehensive for larger firms, supervision
of certain smaller firms (including some small banks, insurance
companies, securities dealers, and investment managers) was
thought to require enhancement. In response to these findings,
the FSA commenced a project looking at AML/CFT systems and
controls in small firms: 159 small firms were selected across the
wholesale and retail sectors, and a report was published in May
2010. In addition, the FSA’s Financial Crime Operations Team
now routinely visits small firms as part of its case work
and ongoing thematic work, and has visited a total of 337 firms
from 2007 to 2010.
All types of DNFBPs, as defined in the FATF Recommendations,
are active in the United Kingdom and all are covered by the
MLRs. The DNFBPs appeared to be effectively complying with
their STR obligations. There was generally comprehensive
monitoring of casinos, lawyers, and certain accountants; the main
deficiencies identified in the assessment were the lack of
AML/CFT supervision for the real estate and company service
provider sectors and certain unregulated accountants.
The United Kingdom has a wide range of legal persons and
arrangements. Legal forms include: Companies Act companies
and other forms of companies (both public and private),
partnerships, and societies. Trusts are a longstanding, popular,
and integral part of the legal and economic landscape of the
United Kingdom.
To view full report click here
____________________________________________________
US State Department Money Laundering Report - 2012:
The United Kingdom (UK) plays a leading role in European and
world finance and remains attractive to money launderers
because of the size, sophistication, and reputation of its financial
markets. Although narcotics are still a major source of illegal
proceeds for money laundering, the proceeds of other offenses,
such as financial fraud and the smuggling of people and goods,
have become increasingly important. The past few years have
seen an increase in the movement of cash via the non-bank
financial system, as banks and mainstream financial institutions
have tightened their controls and increased their vigilance. The
use of bureau de change, cash smugglers (into and out of the
UK), and traditional gatekeepers (including solicitors and
accountants) to move and launder criminal proceeds has been
increasing. Also on the rise are credit/debit card fraud, use of the
internet for fraud, and the purchase of high-value assets to
disguise illegally obtained money.
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All crimes approach
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: NO
KYC covered entities: Banks, credit unions, building societies,
emoney issuers, and credit institutions; insurance companies;
securities and investment service providers and firms;
independent legal professionals, auditors, accountants, tax
advisors, and insolvency practitioners; estate agents; casinos;
high value goods dealers; and trust or company service providers
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 240,582 October 1,
2009 – September 30, 2010
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks, credit unions, building societies,
emoney issuers, and credit institutions; insurance companies;
securities and investment service providers and firms;
independent legal professionals, auditors, accountants, tax
advisors, and insolvency practitioners; estate agents; casinos;
high value goods dealers; and trust or company service providers
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 2,439 in 2009
Convictions: 1,411 in 2009
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
The United Kingdom is a member of the Financial Action Task
Force (FATF). Its most recent mutual evaluation can be found
here: http://www.fatf-gafi.org/infobycountry/0,3380,
en_32250379_32236963_1_70432_1_1_1,00.html
Enforcement and implementation issues and comments:
The United Kingdom has a comprehensive range of anti-money
laundering/countering the financing of terrorism (AML/CFT) laws.
It is an active participant in multilateral efforts to meet AML/CFT
threats. The UK engages in efforts to freeze the assets of
persons who commit terrorist acts, and its legislative framework
relies on “reasonable belief” rather than “reasonable suspicion”
as the burden of proof for freezing assets. The UK continuously
reviews and assesses the effectiveness and proportionality of its
AML/CFT regime – including through the approval of updated and
more accessible industry guidance. In order to improve the regime
further, and based on the responses in a recent industry
consultation, the UK plans to announce proposals to improve
guidance and will publish these towards the end of the year.
The Financial Services Authority, which supervises firms for
compliance with their legal and regulatory obligations, including
those related to politically exposed persons (PEPs), will be
merged with the Bank of England at the end of 2012. Also, the
Serious Organized Crime Agency, which includes the UK financial
intelligence unit, will transition to the National Crime Agency by
2013. It is important that these changes not impede the UK’s
AML/CFT efforts.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
The United Kingdom of Great Britain and Northern Ireland (UK) is
a consumer country of illicit drugs. Like other developed nations,
the UK faces a serious domestic drug problem. Crime syndicates
from around the world exploit the illegal narcotics market and use
the UK as a major transshipping route.
The Home Office reported 8.8 percent of 16 to 69 year olds in
England and Wales, or about 2.9 million people, used illicit drugs
in 2010/2011. This rate is the lowest since measurement began in
1996 and is mainly due to a long-term decline in the use of
cannabis. The UK has a robust drug-control institutional capability
and strictly enforces national precursor chemical legislation in
compliance with EU regulations. The UK is a party to the 1988 UN
Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 1)
The United Kingdom (UK) is a destination country for men,
women, and children primarily from Africa, Asia, and Eastern
Europe who are subjected to sex trafficking and forced labor,
including forced domestic service. Unaccompanied children in the
UK represent an especially vulnerable group for trafficking. Some
UK children are subjected to sex trafficking within the country, and
some foreign unaccompanied children continue to be forced to
beg or steal. Some migrant workers are subjected to forced labor
in agriculture, construction, food processing, domestic service,
and food services. Some domestic workers reportedly are
subjected to forced labor by diplomats in the UK; there are
concerns that these diplomatic employers are often immune from
prosecution. Some children, mostly from Vietnam and China,
continued to be subjected to debt bondage by Vietnamese
organized crime gangs for forced work on cannabis farms. NGOs
providing assistance to trafficked women reported a considerable
increase in referrals of Ugandan nationals in 2010; Nigerian
nationals remain one of the highest percentages of referrals. A
recent study conducted by the Association of Chief Police Officers
found that a large percentage of women forced into prostitution in
England and Wales come from China.
The Government of the United Kingdom fully complies with the
minimum standards for the elimination of trafficking. The
government demonstrated vigorous prosecutions and convictions
of sex trafficking offenders in England, obtaining during the
reporting period the highest sentence on record for trafficking in
the United Kingdom. The UK government improved its
prosecution of forced labor offenses and continued to implement
its National Referral Mechanism (NRM). NGOs, however,
continued to report inadequate and inconsistent protection efforts
for trafficking victims in the UK. Some potential and confirmed
trafficking victims, including children, were prosecuted and
imprisoned for committing offenses as a direct result of being
trafficked. Due to devolution of law enforcement powers to
Northern Ireland, Wales, and especially Scotland, each region
has its own human trafficking laws and anti-trafficking
enforcement powers. Inadequate protection measures for victims
in Northern Ireland, Scotland, and Wales could result in their re-
trafficking throughout the Kingdom and the Republic of Ireland.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The UK continued to play a leading role in global
counterterrorism efforts. The new coalition government
established a National Security Council; appointed a National
Security Adviser; completed a Strategic Defense and Security
Review (SDSR); and published a new National Security Strategy
(NSS). The SDSR and NSS reviewed threats to the UK's national
security and set out new measures to counter terrorism.
The British government began a review of counterterrorism
legislation, measures, and programs with an aim toward balancing
liberty and security. In January, the United Kingdom (UK) raised
its national threat level to the UK from international terrorism from
substantial to severe, meaning that a terrorist attack was highly
likely. In September, the UK published for the first time its threat
levels from Irish-related terrorism: severe in Northern Ireland,
substantial in mainland Britain.
2010 Terrorist Incidents: Throughout the year, dissident
republican groups operating in Northern Ireland stepped up their
campaigns of terrorism. The Police Service of Northern Ireland
(PSNI) reported that between January and November, there were
two deaths related to Northern Ireland's security situation, 79
shooting incidents, 87 bombing incidents, 54 casualties resulting
from paramilitary-style assaults, and 36 casualties resulting from
paramilitary-style shootings. The PSNI estimated a rise of more
than 80 percent in bombing incidents in Northern Ireland between
January and November compared with 2009. Examples of
incidents included:
On October 29, UK police and security services intercepted an
explosive device concealed in a computer printer toner cartridge
aboard a cargo aircraft at East Midlands Airport in Leicestershire
bound for Chicago, believed to have originated in Yemen. The
investigation into the "cargo bomb plot" was ongoing through the
end of the year, but Home Secretary Theresa May indicated to
Parliament in November that the UK government believed al-
Qa'ida in the Arabian Peninsula was responsible.
Legislation and Law Enforcement: In April in NI, policing and
justice powers were fully transferred from the UK government in
London to NI. In November, the Independent Monitoring
Commission, a four-commissioner team established by the British
and Irish governments in 2004 to support devolution by reporting
on paramilitary activity and security, indicated in its annual report
that dissidents in Northern Ireland had "steadily increased the
number of improvised explosive devises they deployed and the
proportion of those that detonated."
In June, Home Secretary Theresa May extended for six months
the government's power to hold terrorist suspects for 28 days in
pre-charge detention. The provision must be renewed annually or
it expires, and May indicated that the government believed the
provision should only be temporary. The following month, May
announced a broad review of the government's counterterrorism
legislation, measures, and programs, and indicated that the pre-
charge detention provision would be part of that review. The
review also considered the utility of the UK's heavily-debated
"control orders." The Prevention of Terrorism Act 2005 empowers
the Home Secretary to issue control orders "impos[ing] obligations
on [an individual] for purposes connected with protecting
members of the public from a risk of terrorism." In practice, control
orders have been used to impose near-house arrest and restrict
movement and access to the Internet by terrorism suspects who
cannot be prosecuted or deported. In undertaking the review, the
government cited the need to balance security and civil liberties.
In July, the European Court of Human Rights issued a preliminary
ruling blocking the extradition from the UK to the United States of
British terrorism suspects Abu Hamza, Babar Ahmad, Seyla Talha
Ahsan, and Haroon Rashid Aswat over concerns that the
sentences and prison conditions the men could face if convicted
in the United States could violate the European Convention on
Human Rights. The court asked the UK government to submit
further information on these cases. In November, Abu Hamza
successfully appealed the government's attempts to strip him of
his UK passport.
In July, three men were sentenced to life in prison for their
involvement in a 2006 plot to detonate homemade liquid
explosives on transatlantic flights. Ibrahim Savant, Arafat Waheed
Khan, and Waheed Zaman, who had previously been cleared of
involvement in the plot, were found guilty at a retrial of conspiracy
to murder. The men were told by the judge that they would serve
minimum terms of 20 years.
In response to a decision by the European Court of Human
Rights, which found that the UK's police use of stop-and-search
powers under Section 44 of the Terrorism Act 2000 were drawn
too broadly and failed to protect civil liberties, the Home Secretary
announced in July that police would need to rely on Section 43 of
the Act, which requires officers to "reasonably suspect [the
person] to be a terrorist" before subjecting them to a search.
Police retained the authority to search vehicles under Section 44,
provided they had reasonable suspicion of terrorist activity.
In October, High Court Judge Lady Justice Hallett opened an
inquest into the July 2005 terrorist attacks on London's transport
network that left 52 people dead. The inquest will investigate,
among other things, whether the security services could have
prevented the 2005 attacks. The inquest continued at year's end.
In November, in response to the cargo bomb plot, the government
announced a review of airfreight security, imposed temporary
restrictions on the transport of large printer cartridges by air, and
suspended the transport of unaccompanied airfreight from Yemen
and Somalia. The move followed a January decision by the
government to suspend all direct flights between the UK and
Yemen as part of increased security measures after the
attempted Christmas Day 2009 terrorist attack on Northwest Flight
253. After the cargo bomb plot was discovered, the government
began working closely with the aviation industry to devise a long-
term security screening regime for cargo to mitigate the threats
the plot revealed. On December 20, UK police indicated that 12
men between the ages of 17 and 28 were detained on suspicion
of the commission, preparation, or instigation of an act of
terrorism in the UK. On December 27, nine of the 12 men
arrested were charged with conspiracy to cause explosions and
preparing acts of terrorism against targets in the UK, allegedly
including the U.S. Embassy.
London's Metropolitan Police Service launched an "If You Suspect
It, Report It" awareness campaign in December to enlist public
support in identifying suspicious activity related to acts of
terrorism.
Countering Terrorist Finance: The UK has a comprehensive
range of laws aimed at anti-money laundering and counterterrorist
financing (AML/CTF). It is a member of the Financial Action Task
Force (FATF) and an active participant in FATF-style regional
bodies to meet evolving anti-money laundering and
counterterrorism financing threats. The UK engages in efforts to
freeze the assets of persons who commit terrorist acts, as
required by the UN, including through implementation of UNSCRs
1267 and 1373. In January, the UK Supreme Court held that the
government had earlier exceeded its authority by imposing asset-
freezing orders that went beyond the requirements of UNSCR
1373. The Supreme Court reinstated temporary asset-freezing
regulations as an interim measure following the judgment. In
December, the UK replaced the temporary provisions with a new
legislative framework that contained a higher standard of proof for
freezing assets; “reasonable belief” rather than “reasonable
suspicion.” The legislation was awaiting Royal Assent to enact it at
year's end.
To further improve and update Bermuda's anti-money laundering
and anti-terrorist financing regulations, in August, Bermuda's
Parliament enacted the Proceeds of Crime Regulations
(Supervision and Enforcement) Amendment Act that would require
the Bermuda Bar Association and the Chartered Accountants in
Bermuda to establish jointly a board to regulate law and
accountancy firms in order to prevent money laundering and
terrorist financing.
Regional and International Cooperation: The UK cooperates with
other nations and international organizations to counter terrorism,
including in the UN, UNSC, EU, Commonwealth, NATO, Council of
Europe, G8, International Atomic Energy Agency, IMF-World
Bank, the Global Initiative to Combat Nuclear Terrorism, and
Interpol. In January, the UK hosted a conference on Afghanistan
that brought over 75 nations and multilateral organizations
together to pledge international support for Afghan-led
reintegration of former insurgents and transition of full security
responsibility to the Afghan leadership. In January, the UK hosted
a Friends of Yemen conference in London, which brought
together representatives from the Gulf Cooperation Council, G8,
UN, EU, Arab League, IMF, World Bank, and other European
nations to coordinate international engagement and support for
Yemen's efforts to deliver unity, security, and stability. The UK
signed the Beijing Convention on the Suppression of Unlawful
Acts Relating to International Civil Aviation and the Protocol to the
Convention for the Suppression of Unlawful Seizure of Aircraft at
the conclusion of an International Civil Aviation Organization
diplomatic conference in September.
Countering Radicalization and Violent Extremism: The UK's
"Prevent" strategy, launched in 2007 to counter radicalization,
outlined a number of objectives, such as support to mainstream
voices and increasing community resilience, and involved a range
of government actors, particularly the Home Office, The Foreign
and Commonwealth Office, the Department of Communities and
Local Government, local authorities, and the police. Many of the
programs have been run by community organizations, supported
by government funding. Examples of Prevent programs include
interfaith activities, diversionary programs for youth, professional
development for mainstream community and faith leaders,
speaking tours by mainstream Islamic scholars, imam training
programs, and projects to equip young people with arguments to
counter violent extremism. The Research, Information,
Communications Unit (RICU), which is physically located in the
Home Office, has been responsible for managing
counterterrorism communications, including those related to
Prevent. The Coalition government has initiated a review of the
strategy "to more clearly separate work on preventing violent
extremism from work to promote integration," which will determine
the future direction of counter-radicalization programs in the UK.
____________________________________________________
Links:
Serious Organised Crime Agency (SOCA)
Worldwide AML Legislation (International Bar Association)
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*In 2009, the UK was removed from the regular follow-up process and
agreed that it should now report on any further improvements to its
Anti-Money Laundering/Combating the Financing of Terrorism
(AML/CFT) system on a biennial basis.
agreed that it should now report on any further improvements to its
Anti-Money Laundering/Combating the Financing of Terrorism
(AML/CFT) system on a biennial basis.
| UNITED KINGDOM |
| KnowYourCountry |
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AML News / Updates
April 25, 2012 - UK Treasury issue Supplement to Notice on Iran
(nuclear proliferation) of 26 March 2012. Restrictions on the provision of
insurance and reinsurance relating to the import, purchase or transport
of Iranian crude oil, petroleum products and petrochemical products.
Read Supplement
February 22, 2012 - Terrorist Asset-Freezing etc. Act 2010
Renewal of final designations
Read More
April 25, 2012 - UK Treasury issue Supplement to Notice on Iran
(nuclear proliferation) of 26 March 2012. Restrictions on the provision of
insurance and reinsurance relating to the import, purchase or transport
of Iranian crude oil, petroleum products and petrochemical products.
Read Supplement
February 22, 2012 - Terrorist Asset-Freezing etc. Act 2010
Renewal of final designations
Read More
| Last Updated: 25 April 2012 |