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Money Laundering: EU Action

Question for Treasury

UIN 270754, tabled on 28 June 2019

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of UK compliance with (a) current and (b) future EU anti-money laundering policies after the UK leaves the EU.

Answered on

8 July 2019

The UK is a founding member and strong support of the Financial Action Taskforce (FATF), which sets global anti-money laundering and counter-terrorist financing (AML/CTF) standards. These standards are generally incorporated into UK law through the transposition of EU directives.

The Fourth EU Anti-Money Laundering Directive was transposed into UK law by the Money Laundering Regulations 2017. This directive updated EU anti-money laundering policy to reflect the 2012 update to the FATF standards.

The Fifth EU Anti-Money Laundering Directive (5MLD) was finalised in 2018 to further strengthen transparency and counter-terrorist legislation. The UK played a significant role in the negotiation of 5MLD and shares the objectives which it seeks to achieve on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. HM Treasury is currently running a consultation process inviting views and evidence on the steps the government proposes to take to meet the UK’s expected obligation to implement 5MLD by January 2020, and expects to publish an impact assessment in due course.

The Sanctions and Anti-Money Laundering Act gives the UK the powers to update its future anti-money laundering regime post EU-exit. As a leading member of the FATF, the UK will continue updating anti-money laundering policies according to international standards, ensuring the UK’s AML/CTF regime is kept up to date, effective and proportionate.

The Political Declaration that has been agreed with the EU contains a statement of mutual intent that the future relationship should cover money laundering and terrorist-financing.

Answered by

Treasury