UK Could Face Tougher Dirty Money Fight Post-Brexit: FT

The UK is at risk of becoming more vulnerable to illicit funds if it doesn’t closely cooperate with EU authorities on a post-Brexit deal, City of London lawyers told the Financial Times.

The concerns follow recently announced plans by the European Union to strengthen its anti-money laundering controls by empowering an EU-level supervisory agency to police financial institutions and national supervisors, and imposing new legislation on member-states. The proposal, which was a topic of a call last week among EU finance ministers, would separately expedite the sharing of financial intelligence among European nations.

But the talks have yet to address what role the UK will have in cooperating with money laundering probes after it formally leaves the bloc, the FT said in a report Tuesday.

“The question is whether the UK will be able to access these arrangements as part of any Brexit deal, and if not, whether that will hinder our ability to combat and deal with money laundering in the future,” Alison Saunders, a former director of public prosecutions, told the newspaper.

The more immediate danger for the UK is that it could find it harder to obtain crucial financial intelligence from EU member-states without a formal agreement with the union, according to Anna Bradshaw, a partner with Peters & Peters.

“The UK position has always been that it wants a special relationship, not just as another third country,” Bradshaw told the FT. “But the EU may take a view that is it is not able to accommodate the UK position . . . and the UK’s ability to participate [in the EU plan] as a third country is not looking very rosy.”

In a recent speech cited by the news outlet, EU lead negotiator Michael Barnier said he was “disappointed by the UK’s lack of ambition in a number of areas that may not be central to the negotiation, but which are nonetheless important and symbolic . . . I’m thinking, for instance of the fight against money laundering.”

Inconsistencies between the UK and EU’s AML rules and supervisory arrangements would also likely pose “significant issues for regulated UK firms with continuing business operations across the bloc,” said Ruth Paley, who specialises in corporate crime at Eversheds Sutherland.


RiskScreen: Eliminating Financial Crime with Smart Technology, 28 May 2020