UK’S LEAKED AML/CFT EVALUATION (AND HOW RATINGS METHODOLOGY WILL BE USED TO ASSESS NEW ZEALAND’S REGIME)

Interest in New Zealand on 24th October carried an article saying that the mutual evaluation to FATF standards of New Zealand is due for 2020.  It says that leaked results from the UK’s ‘report reveals an effectiveness deficit, and opportunities for other countries to boost their FATF ratings.  According the article, it seems that the UK’s AML regime is due to receive the second highest rating amongst 61 countries assessed to date.  The UK’s reported scores rank its AML regime behind only the US, yet both countries feature prominently in nearly every major money laundering scandal.  The article claims that, using on official figures, the UK’s ‘success rate’ by UN standards was the lowest of all countries surveyed. UK authorities successfully intercepted 0.1% of criminal proceeds, The author says that the “outcomes” used by FATF mostly reflect the efforts of regulatory and enforcement authorities, and are not outcomes in the usual sense of whether those efforts have any meaningful effect or impact on serious crime.  Criticising the marking method and evaluation process, the author nevertheless says that although FATF’s new ‘effectiveness’ ratings system arguably lacks much meaning (at least in terms of recognised evaluative principles and policy effectiveness), low scores have a very real impact on any jurisdiction’s access to financial markets.

https://www.interest.co.nz/opinion/96510/ron-pol-reflects-effectiveness-issues-revealed-uk’s-leaked-amlcft-evaluation-shares

UK DEFENCES AGAINST MONEY LAUNDERERS “OVERWHELMINGLY EFFECTIVE”, ACCORDING TO FATF

ACAMS carried the report referred to by the Interest article on 19th October.  The draft report is said to praise the country’s “aggressive” prosecution of money launderers and terrorist financiers, confiscation of £1 billion in illicit assets over the past 4 years and implementation of counterterrorism and counterproliferation sanctions.  The UK rated “high” in 2 outcomes, “substantial” in 6, “moderate”—the second-lowest possible score—in 3, and did not rate “low” in any.  Those totals match the US, which has held the top spot in terms of efficacy for the past 2 years after receiving 4 high, four substantial, 2 moderate and 1 low score in the same 11 categories.  The report was approved by FATF members at the recent plenary.  It is said that the British delegation unsuccessfully lobbied to have the UK’s moderate ratings — a failing score — for AML supervision and use of financial intelligence upgraded.  The UK also rated fully “compliant” or “largely compliant” in 38 of FATF’s 40 technical recommendations for combating financial crime, whereas the US received 4 non-compliant grades in its December 2016 evaluation.

https://www.moneylaundering.com/news/uk-defenses-against-money-launderers-overwhelmingly-effective-fatf/

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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