Government has announced that new failure to prevent offences provisions will be proposed as an amendment to the Economic Crime and Transparency Bill currently before Parliament.
The provisions are likely to attract cross party support and would make it an offence for an organisation to fail to prevent fraud and possibly also money laundering. Writing for New Law Journal, Anita Clifford reports on the broadening scope of the proposed ‘failure to prevent’ offences and the likelihood of their success examining how organisations will be compelled to review their internal controls. She poses the question that if an offence includes failure to prevent money laundering just how will the legislation interact with AML regulation?
“Presumably, a company having reasonable procedures to prevent money laundering will mean policies, controls and procedures that reflect the requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) but there is scope for guidance to clash. A company with gold-standard AML policies that are actually applied will have little to worry about but there is a question mark over whether a company with AML controls that fall short of the technical requirements of the MLRs in one or two areas could still run a defence of “reasonable procedures” if charged with an offence. Just how any new FTP money laundering provision interacts with the AML regulations will require thought.”
Read article attached: [NLJ-2023-3-Mar-Specialist Corporate_crime]
RLC member Anita Clifford has a strong financial crime interest and advises on anti-money laundering investigations and regulatory requirements, suspicious activity reporting and account freezing and is a ranked junior for POCA work in both Legal 500 and Chambers & Partners. She is also a contributor to the Lloyd’s Law Reports: Financial Crime: [Anita Clifford]