UK to soften AML penalties for businesses

The UK government is planning to scrap a raft of criminal penalties for firms that fail to use proper systems and controls for fighting money laundering

HM Treasury says its recent review of the money laundering regulations brought in 2007 found that they are “broadly effective and proportionate, but that improvements could be made”.

It argues that moves need to be made to reduce the regulatory burden on British businesses and discourage a “tick-box” approach to anti-money laundering.

Over two dozen criminal penalties for businesses which fail to have the appropriate systems and controls in place could be scrapped. This would allow businesses to implement a fully risk-based approach, where they make their own assessment of the situation and implement the appropriate systems and controls, says HM Treasury.

Civil penalties will remain and the government will be consulting on whether regulators should have the power to impose additional penalties.

There are also plans for a general exclusion for very small businesses – for example those with below £13,000 VAT-exclusive turnover per annum.

The proposals are now open to consultation until 30 August.