Overview of United Kingdom Anti-Money Laundering Law

Overview of United Kingdom Anti-Money Laundering Law

by William H. Byrnes IV, Robert J. Munro, and Amy Marie Stevens 

The United Kingdom is is ranked as the 3rd largest economy in Europe and 7th worldwide. It ties New York in rank as the largest financial hub in the world. Despite extensive anti-money laundering legislation, the United Kingdom is still considered to be a "Jurisdiction of Primary Concern" in the area of money laundering. The following Emerging Issues Analysis explores the United Kingdom, its vulnerabilities, and its anti-money laundering efforts.

Excerpt:

A. Money Laundering Risk in United Kingdom

The United Kingdom is a union of four constituent countries: England, Wales, Northern Ireland, and Scotland. The United Kingdom is ranked as the third largest economy in Europe and the seventh worldwide. London ties New York City in rank as the largest financial hub in the world. According to the KOF Index of Globalization, a survey that measures the three main dimensions of globalization economic, social, and political, the United Kingdom ranks fourteen out of 208 countries. With its vast economy and leadership role in the financial world, the United Kingdom has been deemed highly susceptible to money laundering by way of cash/value couriering, financial abuses throughout non-financial businesses and cash intensive businesses, as well as bank accounts and financial sector products.

Despite extensive anti-money laundering legislation, the United Kingdom is still considered to be a "Jurisdiction of Primary Concern" by the U.S. State Department, according to the 2012 International Narcotics Control Strategy Report (INCSR). The designation is due in part to the immense financial market and the sheer size of the economy, which the INCSR report has determined makes countries, such as the United States and the United Kingdom, and their financial institutions vulnerable to facilitating transactions involving proceeds from serious crimes and narcotic related money laundering.

The United Kingdom is not an offshore financial center itself; it does, however, have jurisdiction over fourteen British Overseas Territories, many of which have been identified as offshore banking destinations.

The United Kingdom security agencies, such as MI5 and the Finance Ministry, known as Her Majesty's Treasury, consider the UK to be a prominent and significant target to terrorists both nationally and internationally. Authorities, legislators, and financial institutions alike have well-established protocol and constantly reevaluate circumstances and concerns related to physical terrorist plots as well as economic threats. [footnotes omitted]

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William H. Byrnes, IV, is the Associate Dean of the Walter H. & Dorothy B. Diamond International Tax & Financial Services Graduate Program at Thomas Jefferson School of Law in San Diego, CA (www.llmprogram.org).

Robert J. Munro is Professor of Law at Thomas Jefferson School of Law in San Diego, CA. and a Senior Research Fellow and Director of Research for North America at CIDOEC at Jesus College, Cambridge University.

Amy Marie Stevens works for the Department of Justice in the Executive Office for Immigration Review.