FATF AML Deficiency List
US Dept of State Money Laundering assessment
Conduit for Offshore Finance Centers
The United Kingdom is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in the United Kingdom was undertaken by the Financial Action Task Force (FATF) in 2018. According to that Evaluation, the United Kingdom was deemed Compliant for 23 and Largely Compliant for 15 of the FATF 40 Recommendations. It was deemed Highly Effective for 4 and Substantially Effective for 4 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
United Kingdom is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
The UK plays a leading role in European and world finance and remains one of the strongest global actors in combatting illicit finance. Money laundering presents a significant risk to the UK because of the size, sophistication, and reputation of its financial and real estate markets. UK law enforcement combats cash-based money laundering, the drug trade, and high-end money laundering through the financial sector and professional services. In July 2019, the UK published its Economic Crime Plan, which describes public and private sector actions over the next three years to protect the UK against economic crime. The UK should follow through on plans to strengthen the capabilities of the FIU, reduce inconsistencies in the supervisory regime, and increase its international reach to tackle money laundering.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 77
World Governance Indicator – Control of Corruption 94
Corruption does not represent a constraint to business in the United Kingdom, and companies are very unlikely to be put in a situation where bribery is needed. Despite some isolated instances of abuse of administrative power, the UK promotes high ethical standards in public services. The UK Bribery Act establishes liability for corruption offences committed anywhere in the world, including bribery between businesses and of foreign public officials. It also introduces a liability offence for companies that fail to prevent bribery committed by representatives; this can be avoided only by implementing preventive anti-corruption policies and procedures. There is no distinction made between bribery and facilitation payments, and these practices rarely occur in the UK. Gifts and hospitality can be considered illegal depending on the intent and benefit obtained. The UK has a strong legal framework for fighting bribery at home and abroad, and the agencies tasked with fighting corruption are efficient and independent. For further information - GAN Integrity Business Anti-Corruption Portal
The UK, a leading trading power and financial centre, is the third largest economy in Europe after Germany and France. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with less than 2% of the labour force. The UK has large coal, natural gas, and oil resources, but its oil and natural gas reserves are declining; the UK has been a net importer of energy since 2005. Services, particularly banking, insurance, and business services, are key drivers of British GDP growth. Manufacturing, meanwhile, has declined in importance but still accounts for about 10% of economic output.
In 2008, the global financial crisis hit the economy particularly hard, due to the importance of its financial sector. Falling home prices, high consumer debt, and the global economic slowdown compounded Britain's economic problems, pushing the economy into recession in the latter half of 2008 and prompting the then BROWN (Labour) government to implement a number of measures to stimulate the economy and stabilize the financial markets. Facing burgeoning public deficits and debt levels, in 2010 the CAMERON-led coalition government (between Conservatives and Liberal Democrats) initiated an austerity program, which has continued under the new Conservative majority government. However, the deficit still remains one of the highest in the G7, standing at 5.1% of GDP as of mid-2015. London intends to eliminate its deficit by 2020, primarily through additional cuts to public spending and welfare benefits. It has also pledged to lower its corporation tax from 20% to 18% by 2020.
In 2012, weak consumer spending and subdued business investment weighed on the economy, however, GDP grew 1.7% in 2013 and 2.8% in 2014, accelerating because of greater consumer spending and a recovering housing market. As of late 2015, the Bank of England is examining when to begin raising interest rates from historically low levels while being cautious not to damage economic growth. While the UK is one of the fastest growing economies in the G7, economists are concerned about the potential negative impact if the UK votes to leave the EU. The UK has an extensive trade relationship with other EU members through its access to the single market and economic observers have warned an exit could jeopardize its position as the central location for European financial services.
Agriculture - products:
cereals, oilseed, potatoes, vegetables; cattle, sheep, poultry; fish
machine tools, electric power equipment, automation equipment, railroad equipment, shipbuilding, aircraft, motor vehicles and parts, electronics and communications equipment, metals, chemicals, coal, petroleum, paper and paper products, food processing
Exports - commodities:
manufactured goods, fuels, chemicals; food, beverages, tobacco
Exports - partners:
US 14.6%, Germany 10.1%, Switzerland 7%, China 6%, France 5.9%, Netherlands 5.8%, Ireland 5.5% (2015)
Imports - commodities:
manufactured goods, machinery, fuels; foodstuffs
Imports - partners:
Germany 14.8%, China 9.8%, US 9.2%, Netherlands 7.5%, France 5.8%, Belgium 5% (2015)
Investment Climate - US State Department
The United Kingdom (UK) actively encourages foreign direct investment (FDI). Many of the world’s largest firms have UK branches and manufacturing subsidiaries. The UK imposes few impediments to foreign ownership and throughout the past decade, the UK has been Europe’s top recipient of FDI. The UK government provides comprehensive statistics on FDI in its annual Inward Investment Report.
The United States remains the largest source of FDI into the UK and remains the top destination for UK direct investment abroad, continuing the strong investment partnership between the two countries. The UK is politically stable with a modern infrastructure, and U.S. companies have traditionally found establishing a base in the UK to be an effective means of accessing the EU market. Many U.S. companies have operations in the UK, including all top 100 of the Fortune 500 firms. The UK hosts more than half of the European, Middle Eastern and African corporate headquarters of American-owned firms.
Market entry for U.S. firms is facilitated by a common language, legal heritage, and similar business institutions and practices. Long-term political, economic, and regulatory stability, coupled with relatively low rates of taxation and inflation make the UK particularly attractive to foreign investors. The UK Government has sought to attract further foreign investment to the UK through trade missions and through targeting small and medium enterprises. Recent studies show that the UK is also making improvements in financial flexibility, policy regime for start-ups, and entrepreneurial culture. The UK is especially well supported by its financial and professional services industries. The UK has a transparent tax system in which local and foreign-owned companies are taxed alike. The British pound sterling is a free-floating currency with no restrictions on its transfer or conversion. There are no exchange controls restricting the transfer of funds associated with an investment into or out of the UK.
The UK legal system provides a high level of protection for intellectual property. Private ownership is also protected by law and monitored for competition-restricting behavior. U.S. exporters and investors generally will find little difference between the United States and UK in the conduct of business, and common law prevails as the basis for commercial transactions in the UK.
The UK banking sector is the largest in Europe, and foreign investors, employers, and market participants have been treated equally under government initiatives. Government policies are intended to facilitate the free flow of capital and to support the flow of resources in the product and services markets. Foreign investors are able to obtain credit in the local market at normal market terms, and a wide range of credit instruments are available. UK legal, regulatory, and accounting systems are transparent and consistent with international standards.
There is a strong awareness of corporate social responsibility principles among UK businesses. The UK’s labor force is the second largest in the European Union, at just over 40 million people. In Q1 2016, the UK’s unemployment rate was 5.1 %. The unemployment rate is projected to be in the range of 4.3% to 6.3% between 2016 and 2020. http://www.tradingeconomics.com/united-kingdom/unemployment-rate/forecast.
About 26% of UK employees belong to a union, a low proportion by UK historical standards. The United States and UK have enjoyed a "Commerce and Navigation" Treaty since 1815 which guarantees national treatment of U.S. investors. A Bilateral Tax Treaty specifically protects U.S. and UK investors from double taxation. There are no signs of increased protectionism against foreign investment, and none are expected.
Many U.S. firms are attracted to the UK for the domestic market and as a beachhead for the European Union Single Market. On June 23, 2016, the UK will hold a Referendum on its continuing membership in the EU. If the British public votes to leave the EU, it is likely to bring a period of substantial uncertainty in the UK. This is likely to impact the overall attractiveness of the UK as an investment destination for U.S. companies.
If the UK remains a part of the EU, the UK is forecast to experience significant benefits if the U.S. and the EU are able to conclude the Transatlantic Trade and Investment Partnership (TTIP).
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