Britain consults on easing burden of anti-money laundering checks
By Huw Jones
LONDON (Reuters) - Britain's finance ministry on Monday proposed ways to ease the burden of anti-money laundering checks applied by banks, and reflect the impact of Brexit and emergence of new financial activities such as cryptoassets.
The rules are used by 100,000 businesses such as banks, accountants, lawyers, estate agents, and casinos to undertake "know your customer" initial and ongoing checks for potential money laundering red flags.
Banks have been fined millions of pounds for having inadequate systems for enforcing the AML controls. Businesses complain they have been unfairly refused an account due to perceived AML concerns.
The finance ministry said in a paper on Monday, open for public consultation until June 9, that it wants to make AML rules more proportionate for companies and their customers, and clarify when checks are needed, though it has no plans to change monetary thresholds for triggering due diligence.
The call for views did not contain proposals for major rules changes, but said adjustments would be considered. Providing greater clarity on how to apply existing rules could help reduce cases where banks feel compelled to err on the side of caution.
The ministry is considering what guidance it could issue on digital verification of a customer's identity as part of AML checks, and whether legislation is needed. Delays in identity checks, for example, could mean customers of a failed bank facing delays in accessing their money as accounts are transferred to another lender, the ministry said.
"The government is committed to actively encouraging and realising the benefits of digital identity technologies in the UK, without creating or mandating identity cards," the paper said.
Some monetary thresholds for triggering AML checks are denominated in euros, and the ministry said that following Brexit, its preferred option is to have them in sterling.
The consultation also considers ways to improve how agencies such as the Financial Conduct Authority could share AML-related data with each other to crack down on crime.
Britain's National Crime Agency estimates that over 12 billion pounds ($15 billion) of criminal cash is generated annually in the UK, with a realistic possibility that money laundering impacting the UK is in the hundreds of billions of pounds each year.
($1 = 0.7786 pounds)
(Reporting by Huw Jones)
