Bribery, fraud and anti-money laundering | Regulatory Outlook July 2022

Suspicious activity reports: UK Financial Intelligence Unit issues new guidance

As detailed in our Insight, the UK Financial Intelligence Unit (UKFIU), which is part of the National Crime Agency, published (17 June 2022) its updated guidance on suspicious activity reports (SAR) glossary codes and reporting routes, which replaces the previous guidance on this topic.

SARs alert law enforcement agencies to potential money laundering and terrorist financing. SARs are typically made by those working in the regulated sector, such as financial institutions and other professionals, where there are reasonable grounds to suspect money laundering or terrorist financing.

SAR glossary codes allow the UKFIU to conduct further analysis to identify money-laundering trends, high-risk cases for development and to take immediate action where necessary. It is possible to have a SAR with several codes (or no code may apply at all).

The revised guidance includes new codes for SARs where the value is less than £3,000 and where you are unaware of any existing law enforcement interest at the time of reporting.

Register of overseas entities expected to go live on 1 August

The  UK's Economic Crime (Transparency and Enforcement) Act 2022 brings into law a requirement that overseas entities holding UK real estate must disclose their beneficial owners by registering them on the Register of Overseas Entities (more details on this can be found in our Insight). This is in a bid to crack down on foreign criminals using UK property to launder money.

The government has now confirmed that the register is to be launched on 1 August 2022. The government has outlined that there will be severe sanctions for those who do not comply, including restrictions on buying, selling, transferring, leasing or charging their land or property in the UK. Business affected by the legislation should now start to prepare by gathering the necessary information needed to register on the new Register of Overseas Entities.

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No 2) Regulations 2022

On 12 July, the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No 2) Regulations 2022 (SI 2022/782) came into force. these regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) by substituting the list of high-risk third countries in Schedule 3ZA for a new list. On the new list, the following changes have been made: Malta is no longer classed as a high-risk third country for the purposes of enhanced customer due diligence requirements in regulation 33(3) and Gibraltar is now classed as a high-risk third country for the purposes of enhanced customer due diligence requirements in regulation 33(3). 24 other jurisdictions remain on the list as high risk.