Bribery, fraud and anti-money laundering | UK Regulatory Outlook February 2024

The Environment Agency has established a new Economic Crime Unit to combat money laundering and conduct financial investigations in the waste sector, made up of accredited financial investigators and financial intelligence officers and financial crime analysts.

The unit comprises two teams: the Asset Denial Team, focusing on account freezing orders, cash seizures, pre-charge restraints and confiscations; and the Money Laundering Investigations team, responsible for conducting money laundering investigations targeting environmental offences.

Businesses within the waste sector should ensure they are adhering to proper financial practices and reporting any suspicious activities. It is crucial that should the Economic Crime Unit launch an investigation into a business, that businesses cooperate with this and provide necessary information. We have a team of Osborne Clarke experts who can assist with investigations from an early stage, so please get in touch should you need assistance.

Progress of the Criminal Justice Bill

As previously reported, the Criminal Justice Bill, among other things, proposes to further expand the “identification doctrine” to allow companies to be held criminally liable for criminal acts committed by senior managers of the company, to apply to all criminal offences. The bill is now due to have its report stage and third reading on a date to be announced.

See the current version of the bill. Find out more about the expansion of the corporate criminal liability regime in our Insight.

Government response to Law Commission review of SARs regime

The government published its response to the Law Commission’s 2019 report on anti-money laundering and the suspicious activity reports (SARs) regime, accepting or partially accepting 13 of the 19 recommendations made, including that the following should be retained:

the consent regime;
the “all-crimes” approach to reporting suspicious activity; and
the current approach to authorised disclosures on international criminality.
The government intends to issue guidance on the operation of the mixed-funds clause within the Economic Crime and Corporate Transparency Act 2023.

Changes to Money Laundering Regulations

The Money Laundering and Terrorist Financing (Amendment) Regulations 2023 came into force on 10 January 2024, amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017(MLRs) by:

changing the starting point for the assessment where a customer or potential customer is a domestic politically exposed person (PEP); and
inserting definitions for “domestic PEP”, “non-domestic PEP”, and “enhanced risk factors”.
See the explanatory memorandum.

The Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024 came into force on 23 January 2024, also amending the MLRs by:

redefining “high-risk third countries” as those countries identified by the Financial Action Task Force; and
removing Schedule 3ZA, which contains a list of high-risk third countries for which enhanced customer due diligence measures were required under the MLRs.
See the explanatory memorandum.

Guidance on money laundering reporting obligations introduced by ECCTA 2023

The Home Office published guidance setting out the government position on the additional defence against money laundering provisions, introduced by the Economic Crime and Corporate Transparency Act with the aim of helping reporters to optimise the reporting process.

FCA update on reducing and preventing financial crime

The Financial Conduct Authority (FCA) published an update on its work over the last 18 months in reducing and preventing financial crime, which it identified as a priority in its 2022 to 2025 strategy.

The update highlights data and technology, collaboration, consumer awareness and metrics as areas where further cooperation will help mitigate the threats from fraud and money laundering.

Among other things, the FCA’s in 2024 work will focus on:

supporting government proposals to reform the anti-money laundering supervisory scheme; and
working with the Payment Systems Regulator to support the mandatory reimbursement of Authorised Push Payment (APP) fraud (which is expected to enter into force in 2024). See our Insight for more on the new rules.

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