Bribery, fraud and anti-money laundering | UK Regulatory Outlook March 2025

FATF guidance on AML/CFT measures and consultation on financial inclusion

The Financial Action Task Force (FATF) published draft guidance on anti-money laundering (AML) and countering the financing of terrorism (CFT) measures.

The draft guidance reflects recently adopted amendments to the FATF Standards and provides updated best practice examples of implementation of the risk-based approach in AML/CFT.

The FATF launched a related public consultation seeking views and comments on the updated guidance. The deadline for responses is 4 April 2025.

HM Treasury annual report on AML/CFT supervision for 2023/2024

HM Treasury published its annual report on AML and CFT supervision for 2023 to 2024. The UK has 25 AML/CFT supervisors – HMRC, the Financial Conduct Authority (FCA), the Gambling Commission, and the 22 legal and accountancy professional body supervisors.

The report details the activities of the AML/CFT supervisors and is the first year the Treasury has provided new metrics on the guidance and training supervisors provide for firms and data on how supervisors monitor activities according to risk.

The report notes changes in key areas of supervisory activity such as gatekeeping and risk assessment and also includes a summary of enforcement action taken for the 2023/24 period by all supervisors.

The total sum of fines across all 25 supervisors in 2023-24 was £41.5 million, with an average fine amount across all supervisors of approximately £34,000. Common issues identified by the FCA include ineffective money laundering business-wide risk assessments, enhanced due diligence which was not sufficiently risk-sensitive and inadequate compliance monitoring.

See our summary of the 2022/23 report.

Update on the FCA's enforcement transparency proposals

As previously reported, the Financial Conduct Authority (FCA) published Consultation Paper 24/2: Our enforcement guide and publicising enforcement investigations – a new approach in February 2024, and a second consultation in January 2025.

The FCA has announced its decision to discontinue the most controversial aspects of its proposals, the introduction of a "public interest test" for announcing investigations into regulated firms as they start, or while they are ongoing (see Osborne Clarke's response to the original consultation).

The FCA announced its plans to retain the "exceptional circumstances" test for determining whether to publicise investigations into regulated firms, and to take forward a number of other proposals for which there is "broad support", including:

• reactive confirmation of investigations which are already in the public domain, such as those announced by partner regulators or the firms themselves;
• public notifications which focus on the potentially unlawful activities of unregulated firms and regulated firms operating beyond the regulatory boundaries of the FCA, for which it has no supervisory tools available; and
• publishing anonymised details of issues under investigation to help highlight significant areas of concern.

The FCA expects to publish the final policy by the end of June 2025.

See the full letter to the Treasury Select Committee.