The UK has published its 2020 National Risk Assessment (NRA) of ML/TF. NRAs help the UK tackle the risks identified through amendments in AML/CFT policies. Some key findings of this year’s NRA are discussed below.
The NRA reveals that financial services, money service businesses and cash are still at high risk of ML in the UK. Moreover, criminals have updated their methods to commit financial crimes, taking advantage of the rapidly evolving financial technology sector.
The NRA also takes a look at the sectors that have only recently come under the purview of the AML/CFT laws. Since the implementation of the EU’s Fifth Anti-Money Laundering Directive (5MLD), cryptoasset exchange providers, custodian wallet providers, art market participants and letting agency businesses are all regulated. Cryptocurrency service providers, art market participants and letting agency businesses are prone to ML due to the possibility of concealing information about beneficial owners and the final destination. Similarly, professional services are highly vulnerable to financial crime as criminals invest and transfer funds through corporate structures while concealing the origin of the money.
The UK government expects that the proposed reforms of Companies House and Limited Partnership structures will help in improving risk mitigation and beneficial ownership transparency. Overall, the UK’s knowledge of ML/TF risks has improved since 2017. This will help strengthen the country’s reforms related to economic-crime Suspicious Activity Reports and corporate transparency.
Source: Government of UK