International law and guidance
The Financial Action Task Force
The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. Its 40 recommendations are backed by mutual evaluations of its member countries. Countries which are not members of FATF may be members of a FATF-style regional body.
The European Union Fourth Anti-Money Laundering Directive (4 AMLD) was enacted on 25 June 2015 and replaced the previous Third Directive. All EU member states, including the UK, had a two-year window for being complaint with the mandates by 26 June 2017.
The UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) are intended to ensure that the UK’s anti-money laundering regime implements the EU Fourth Money Laundering Directive and is in line the Financial Action Task Force’s standards and recommendations.
The government consulted on the Transposition of the EU Fifth Money Laundering Directive in June 2019. After a high-level consultation in summer 2019,, the government issued a document summarising the responses to the high-level consultation and the government approach on 23 January 2020.
The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 which implement the Fifth Money Laundering Directive came into force on 10 January 2020.
Republic of Ireland
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 applies to the Republic of Ireland. Other useful links include Consultative Committee of Accountancy Bodies in Ireland (CCAB-I) (sector guidance for accountants)
Channel Islands or Isle of Man
Members in the Channel Islands or Isle of Man are not subject to UK legislation, but must signify that they are aware of the legislation on AML passed by the States of the Bailiwick of Guernsey, the States of Jersey or Tynwald, as appropriate.
The Department for Home Affairs (DHA) provides legislation and guidance on anti-money laundering requirements for the Isle of Man. The DHA made the following Code under section 157 of the Proceeds of Crime Act 2008 and section 68 of the Terrorism and Other Crime (Financial Restrictions) Act 2014 Anti-Money Laundering and Countering the Financing of Terrorism Code 2015.
The United States of America has federal anti-money laundering laws and 38 of the 50 US states have AML laws. Some of these state regimes merely establish reporting requirements, while others either mirror federal law or, in some cases, are more stringent than federal law.
During the 1990s, a series of AML laws were enacted to strengthen the AML regime. The most significant of these laws was the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 (the Patriot Act), which was passed into law in the immediate aftermath of the 11 September terrorist attack. The Patriot Act amended The Bank Secrecy Act (BSA) in order to strengthen the government’s ability to prevent, detect and prosecute international money laundering and the financing of terrorism.
To date, the AML procedures requirements of the US Patriot Act do not apply to non-financial institutions including accounting firms and law firms. Nor are these institutions required to file SARs.