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

EU Council and Parliament reach deal on new EU anti-money laundering authority

On 13 December 2023, the European Parliament and Council reached a provisional agreement on the establishment of a new Anti-Money Laundering Authority (AMLA).

The AMLA will be given direct and indirect supervisory powers over high-risk entities in the financial sector, including cryptoasset  providers, where they are deemed to be high risk or operate internationally. The AMLA forms part of the EU's anti-money laundering package, revealed in July 2021, with the aim of tackling money laundering and terrorist financing.

Following approval of the final text of the agreement by representatives of the Member States, the Council and the Parliament will formally adopt the texts. Negotiations between the Council and the Parliament are still in progress with regard to the regulation of anti-money laundering requirements for the private sector.

Expansion of UK corporate criminal attribution for economic crimes

On 26 December 2023, section 196 of the Economic Crime and Corporate Transparency Act (ECCTA) will enter into force, which expands the scope of the "corporate criminal attribution" test to include senior managers within the ambit of individuals deemed to represent the "controlling mind" of a company (see more in our Insight).

Accordingly, organisations will also be guilty of fraud and other specified economic crimes, where a "senior manager" is deemed to have committed those crimes during the course of their work.

However, as previously reported, the Criminal Justice Bill, which was introduced in the House of Commons in November 2023, seeks to further expand the "identification doctrine" to apply to all criminal offences. The bill is currently at the Committee Stage, with the next sitting scheduled for 11 January 2024.

The government is also expected to publish guidance for the new failure to prevent fraud offence under the ECCTA in 2024, upon which the offence will come into force.

To find out more about upcoming changes to the corporate criminal enforcement landscape, watch our video and webinar.

HM Treasury advisory notice on money laundering in high-risk third countries

On 4 December 2023, HM Treasury updated its money laundering advisory notice regarding the risks posed by jurisdictions with unsatisfactory money laundering and terrorist financing controls, to reflect the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2023, which came into effect on 5 December 2023.

The notice has been updated to reflect changes to the UK's high-risk third countries list, and continues to align with the Financial Action Task Force's list of countries deemed as high risk, or under increased monitoring status.

Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulated businesses must apply enhanced customer due diligence and enhanced ongoing monitoring in relation to transactions with any new and existing customers established in high-risk third countries.