While UK’s AML controls are strict, money laundering continues to occur

By Puja Sharma

Money laundering is a significant enabler of serious and organised crime which, according to the
National Crime Agency, generates more than £12bn annually in the UK, according to a report by the Council for Licensed Conveyancers.

The report also found, that around 60% of practices rated as non-compliant following an inspection during the relevant period could not provide an AML training record for relevant staff. With 55% of practices rated as non-compliant following an inspection during the relevant period had not updated their practice-wide risk assessment to account for changes imposed by covid-19 restrictions. Other 50% of practices rated as non-compliant following an inspection during the relevant period had not updated their AML Policy/Procedures following the introduction of the 5th Money Laundering Directive in January 2020.

The remaining 45% of practices rated as non-compliant following an inspection during the relevant period did not demonstrate that adequate sources of funds/wealth enquire were undertaken about a transaction. About 40% of practices rated as non-compliant following an inspection during the relevant period could not provide a sufficient matter risk assessment.

In the recent deal, The Association of Yacht Brokers and Agents (ABYA) has entered into a strategic partnership with SmartSearch, the UK’s leading provider of anti-money laundering (AML) software. The UK’s leading anti-corruption organisation Transparency International has identified boat sales as a conduit for money-laundering and ABYA has been working with HM Treasury and UK Finance to ensure all yacht brokers in the UK and Europe meet the highest AML and sanctions check standards.

The partnership with SmartSearch will provide ABYA members with a product suite of Know Your Business and Know Your Customer(KYC) services in one user journey, allowing them to conduct verification checks quickly and effectively on customers anywhere in the world.

“Our partnership with SmartSearch will put ABYA at the forefront of the marine sector’s ever-changing compliance landscape. It will allow us to deliver an affordable, cost-effective, and streamlined compliance solution to our members, ensuring their AML and sanctions procedures meet HM Treasury and Financial Conduct Authority regulations,” said Peter Norris, ABYA chairman.

In the wake of Money laundering scams in the UK, a FICO survey reveals that British consumers would leave their bank in the wake of a money-laundering scandal, pinpointing the importance of customer relationships. The research from global analytics software provider FICO suggests that UK banks could face a potentially catastrophic customer defection event in the wake of a money-laundering scandal.

Around 56% of UK respondents said they would switch banks if theirs were reported to be involved in such a scandal. The younger age groups would be most eager to swap their financial service provider in the aftermath of a money-laundering scandal: 64% of 18 to 24-year-olds would switch, as would 68% of 25 to 34-year-olds.

Jade Kirk, enterprise business development manager at SmartSearch added: “We are delighted to be partnering with ABYA to give their members peace of mind knowing that their compliance obligations will be taken care of. SmartSearch already works closely with the marine industry and, with potential new regulations looming, we take pride in being able to lessen the burden that comes with compliance, especially for smaller broker firms.”

“ABYA is a forward-thinking organisation that understands the importance of compliance and wants to ensure its members are properly protected. We are looking forward to a great partnership.” kirk added.