Anti-money Laundering : United Kingdom

1. What laws in your jurisdiction prohibit money laundering?

United Kingdom

The principal laws prohibiting money laundering in the UK are the Proceeds of Crime Act 2002 (POCA) and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the Regulations).

Under UK law, there are no parallel state or provisional criminal offences. There are three separate criminal justice systems: England and Wales; Scotland; and Northern Ireland. POCA’s money laundering offences under Part 7 apply throughout the UK.

The governing principle is that a person will be prosecuted under the criminal justice system in which the conduct occurred or is justiciable.

2. What must the government prove to establish a criminal violation of the money laundering laws?

United Kingdom

POCA applies to alleged money laundering conduct that occurred on or after 24 February 2003. There are three primary substantive money laundering offences under POCA, which are considered in further detail below.

Underlying each money laundering offence is the concept of ‘criminal property’ (ie, the proceeds of crime). In relation to each money laundering offence, the prosecution must prove that the property in question is criminal property. Criminal property is defined in section 340 POCA as property that constitutes a person’s benefit from ‘criminal conduct’ or represents such a benefit, in whole or part, and whether directly or indirectly. Criminal conduct is conduct that constitutes an offence in any part of the UK, or would constitute an offence in any part of the UK if it had occurred there (section 340 POCA). For the purposes of POCA, it is immaterial who carried out the criminal conduct that gave rise to the criminal property, who benefitted from it and whether it occurred before or after the coming into force of POCA.

The prosecution must also prove that the person accused of money laundering knew or suspected that the property is criminal property. The threshold for suspicion required to prove that a person knows or suspects that property is criminal property (ie, the proceeds of crime) is low. For these purposes, ‘suspicion’ is as defined by the Court of Appeal in R v Da Silva (2006) EWCA Crim 1654, where the court held that a person ‘must think there is a possibility, which is more than fanciful, that the relevant facts exist’. A ‘vague feeling of unease’ would not be sufficient.

The three primary substantive money laundering offences under POCA are:

• concealing, disguising, converting, transferring or removing criminal property from England and Wales or from Scotland or Northern Ireland (section 327 POCA);
• entering into or becoming concerned in an arrangement, and knowing or suspecting that it facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person (section 328 POCA); and
• acquiring, using or possessing criminal property (section 329 POCA).

It is a defence to a primary money laundering offence if: (i) an ‘authorised disclosure’ is made in the form of a suspicious activity report (SAR) to the National Crime Agency (NCA), requesting consent to undertake the transaction or activity; and (ii) appropriate consent is given or deemed given before any act is done. Such a SAR is also known as a ‘Defence Against Money Laundering SAR’ (DAML SAR).

A person does not commit an offence under section 329 POCA if he acquired, used or had possession of the property for ‘adequate consideration’ (section 329(2)(c) POCA). This defence is available, for example, where the criminal property has been acquired through receipt of monies in relation to the provision of services by a professional advisor (such as a solicitor or accountant). The limitations of this defence are set out in section 329(3) POCA.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 cover obligations that regulated firms have in relation to anti-money laundering (AML) and counter-terrorist financing (CTF), and implement the Fourth and Fifth EU Money Laundering Directives. The UK opted out of implementing the Sixth EU Money Laundering Directive in September 2017, and has since exited the EU.

Failing to meet obligations under the Regulations is a criminal offence under Regulation 86; the Regulations also create other offences (eg, prejudicing an investigation and providing false or misleading information).

3. What are the predicate offences to money laundering? Do they include foreign crimes and tax offences?

United Kingdom

Money laundering offences under POCA are on an ‘all crimes’ basis, which means that the money laundering offences are not restricted to a particular or limited type of predicate offence. Tax offences have always been predicate crimes for the purposes of the money laundering offences under POCA.

Part 7 of POCA defines ‘criminal conduct’ as conduct that constitutes an offence in the UK, or would constitute an offence in the UK if it had occurred there. It is also immaterial who carried out the conduct, who benefited from it and whether the conduct occurred before or after the coming into force of POCA (section 340).

Foreign crimes are therefore also predicate offences if the conduct in question would be unlawful under UK criminal law if it had occurred in the UK. In other words, if the conduct constituting the foreign crime would not constitute an offence in the UK, it would not fall within the definition of ‘criminal conduct’ and therefore no money laundering offence is committed in the UK.

There are also some narrow exceptions relating to overseas conduct under a statutory instrument.

4. Is there extraterritorial jurisdiction for violations of your jurisdiction’s money laundering laws?

United Kingdom

The courts have held that the primary offences have some extraterritorial application. A person who is not in the UK can be prosecuted for a money laundering offence in the UK where there is a UK nexus. For example, where their conduct took place entirely outside the UK in circumstances where a substantial element of the overall criminality took place in the UK and its harmful consequences were felt in the UK (see R v Rogers (2014) EWCA Crim 1680, paragraph 55).

Where the proceeds of foreign crimes are laundered in the UK, the essential question is whether the property is criminal property; namely property that is or represents, in whole or part and whether directly or indirectly, a person’s benefit from criminal conduct, and the person knows or suspects that it constitutes or represents such a benefit. Laundering the proceeds of foreign crimes is an offence under POCA if the criminal conduct either constitutes an offence in the UK or would constitute an offence in any part of the UK, if it had occurred there. If the conduct constituting the foreign crime would not constitute an offence in the UK, it would not fall within the definition of criminal conduct and therefore no money laundering offence would be committed in the UK.

5. Is there corporate criminal liability for money laundering offences, or is liability limited to individuals?

United Kingdom

Under UK law, criminal liability attaches to both legal and natural persons. Therefore, a corporate entity may be criminally liable for committing a money laundering offence.

Corporate criminal liability for a substantive money laundering offence must be established under the ‘identification principle’. This requires the identification of a person or persons representing the ‘controlling mind and will’ of the company, who are of sufficient seniority and who have sufficient control such that their acts are attributable to the company itself. In practice, this is limited to a small number of directors and senior managers, and complicates the prosecution of corporates, particularly in relation to large organisations with complex structures.

The effectiveness of the identification principle as the basis for corporate criminal responsibility has been a cause for debate. In June 2022, the Law Commission, a statutory independent body, published its Options Paper assessing options for reform to corporate criminal liability in England & Wales, and put forward an option to extend the ‘identification principle’ to capture the acts of a wider set of senior individuals whose mental acts and states might result in a corporate entity becoming criminally liable.

The criminal offences under the Regulations also apply to corporates. Under the Regulations, a corporate commits an offence if it contravenes a relevant requirement in relation to AML policies and procedures. 

6. Which government authorities are responsible for investigating violations of the money laundering laws?

United Kingdom

The principal authorities that investigate money laundering offences are the police, the National Crime Agency (NCA) and HM Revenue & Customs (HMRC).

The Serious Fraud Office (SFO) investigates and prosecutes allegations involving serious or complex fraud or corruption, which can involve money laundering.

Similarly, the Financial Conduct Authority (FCA) investigates and prosecutes matters involving regulated entities or activities.

The FCA, HMRC, the Gambling Commission and 25 other professional bodies act as supervisory authorities under POCA and the Regulations.

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) was established in 2018 and is based within the FCA. Its aim is to improve the consistency of professional body AML supervision. It has the power to ensure that the 25 professional body supervisors meet the standards required by the Regulations. The Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017/1301 set out OPBAS’s duties and powers.

7. Which government agencies are responsible for the prosecution of money laundering offences?

United Kingdom

Following an investigation by either the police, NCA or HMRC, the Crown Prosecution Service (CPS) is responsible for prosecuting money laundering offences.

As well as investigating, the SFO and FCA also have the power to prosecute. The SFO investigates and prosecutes allegations involving serious or complex fraud or corruption, which can involve money laundering, and the FCA investigates and prosecutes matters involving regulated entities or activities.

The FCA, HMRC, the Gambling Commission and 25 other professional bodies act as supervisory authorities under the Regulations, and can take civil or criminal action in relation to breaches of the Regulations or their own regulatory rules. Supervisory authorities may also take other regulatory action in relation to failures in money laundering systems and controls.

8. What is the statute of limitations for money laundering offences?

United Kingdom

Under UK criminal law, there is no limitation period for the prosecution of offences, save in respect of summary-only offences (which are offences triable only in the magistrates’ court, the lower criminal court). This applies equally to money laundering offences. The only requirement is that the money laundering offence was committed after the POCA commencement date (24 February 2003); the date of the underlying criminal conduct that gave rise to the criminal property is immaterial.

9. What are the penalties for a criminal violation of the money laundering laws?

United Kingdom

For individuals, the primary money laundering offences under POCA carry a maximum penalty of 14 years’ imprisonment or an unlimited fine, or both. Offences under the Regulations are punishable with a maximum penalty of two years’ imprisonment or an unlimited fine, or both.

The offences of failing to disclose, prejudicing an investigation and tipping-off are offences triable either summarily or on indictment. The failure to disclose offences are punishable with a maximum of five years’ imprisonment (or an unlimited fine, or both) while the maximum penalty for tipping off and prejudicing an investigation is two years’ imprisonment or an unlimited fine, or both.

For a legal entity, the maximum penalty is an unlimited fine in relation to offences under POCA and the Regulations.

Unlike an individual defendant, a corporate defendant in cases prosecuted by the SFO and CPS can enter into a deferred prosecution agreement (DPA) in relation to the money laundering offences under POCA and the criminal offence under the Regulations of contravening a relevant requirement in relation to AML policies and procedures. A DPA requires an admission of some wrongdoing but avoids a criminal conviction. A DPA usually contains conditions requiring the payment of a fine, disgorgement of any benefit from the wrongdoing and the payment of the prosecution costs. It can also require continued cooperation with an ongoing investigation and a period of monitoring of policies and procedures. A DPA is for a fixed period, agreed between the parties and must be approved by a judge. At the successful conclusion of a DPA, the criminal proceedings against the corporate defendant are concluded.

The sentencing process may result in ancillary orders (eg, a confiscation order), which are covered in more detail below.

10. Are there civil penalties for violations of the money laundering laws? What are they?

United Kingdom

In addition to criminal sanctions, the FCA and HMRC can impose civil measures for failing to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the Regulations). These are set out in the Regulations in Chapter 2 of Part 9. These may include the imposition of a monetary penalty in a sum that appears appropriate to the regulator; removing ‘fit and proper’ status from an individual; suspending a firm or individual from undertaking regulated activities; refusing, suspending or cancelling a business’ registration or authorisation; and making a public statement censuring a business. A regulator can also impose a temporary or permanent prohibition on an individual having a management role within a relevant legal person. An injunction may also be obtained in the High Court where there is or may be a breach of a relevant requirement.

In some instances, a supervisory authority such as the FCA may issue a warning notice.

An individual convicted of a money laundering offence may be disqualified from acting as a company director for a fixed period.

11. Is asset forfeiture possible under the money laundering laws? Is it part of the criminal prosecution? What property is subject to forfeiture?

United Kingdom

A number of procedures are available to deprive a money laundering offender of the proceeds of crime.  In the case of a convicted defendant, the authority that investigates or prosecutes is usually the authority that has conduct of the confiscation or forfeiture proceedings.

Confiscation

A confiscation order may be made against a person following a conviction for a criminal offence in the Crown Court and following a committal (or sending) for sentence (or for the purposes of confiscation) from the magistrates’ court to the Crown Court. The order is not directed at a specific property but is made for the recovery of a sum said to represent the value of the benefit from criminal conduct. A period of imprisonment in default of payment of that sum must be set by the court at the time of making the confiscation order.

Restraint

A restraint order prevents a specified person, who is under criminal investigation or subject to criminal proceedings, from dealing with property held by them, where there are reasonable grounds to suspect that they have benefited from criminal conduct. The restraint order is designed to preserve property for confiscation proceedings.

Compensation

A compensation order is an order made by the court requiring the payment of a sum of money to a victim for loss or damage suffered as a result of the criminal conduct.

Disgorgement

Under the deferred prosecution agreement (DPA) regime, a corporate that enters into a DPA may be required to pay a disgorgement figure representing the profits from any wrongdoing.

12. Is civil or non-conviction-based asset forfeiture permitted under the money laundering laws? What property is subject to forfeiture?

United Kingdom

Civil recovery

The UK has a non-conviction-based asset recovery regime, called the civil recovery regime. Civil recovery applies to the proceeds of ‘unlawful conduct’, defined in section 241 POCA as conduct that is unlawful under UK criminal law or, where the conduct occurred outside the UK, is unlawful under the criminal law of that territory and, if it had occurred in the UK, would be unlawful under UK criminal law. Unlawful conduct also includes conduct that occurs outside the UK, constitutes or is connected to the commission of a gross human rights abuse or violation and, if it had occurred in the UK, would be an indictable offence.

 Part 5 of POCA provides for the making of a civil recovery order (CRO) by the High Court for the recovery of property that is or represents property obtained through unlawful conduct. The question of whether property has been obtained through unlawful conduct is decided on the balance of probabilities. A CRO does not require a criminal conviction or any criminal proceedings; it targets property, not the person holding it. An enforcement authority may obtain a CRO against any person it thinks holds recoverable property.

 Asset freezing and forfeiture

POCA provides certain authorities with the power to freeze monies held in bank and building society accounts and to forfeit cash in summary proceedings.

An account freezing order (AFrO) may be made where there are reasonable grounds to suspect that money (being a minimum of £1,000) held in a bank account is recoverable property (ie, obtained through unlawful conduct) or intended for use in unlawful conduct. An AFrO may last up to two years.

Where an AFrO is in place, the court may make an account forfeiture order (AFO) An AFO allows all or part of the funds in the account frozen under the AFrO to be forfeited and paid into the Consolidated Fund. To grant an AFO, the court must be satisfied that the money or part of it was obtained by unlawful conduct, or is intended by any person for use in unlawful conduct. 

13. Which laws or regulations in your jurisdiction impose anti-money laundering compliance requirements on financial institutions and other businesses?

United Kingdom

The Regulations impose anti-money laundering and compliance requirements on financial institutions and the businesses specified in Regulation 8 of the Regulations.

14. What types of institutions are subject to the AML rules?

United Kingdom

The institutions specified in regulation 8 of the Regulations as ‘relevant persons’ are subject to the AML rules. These include:

• credit institutions;
• financial institutions;
• auditors, insolvency practitioners, external accountants and tax advisers;
• Independent legal professionals;
• trust or company service providers;
• estate agents and letting agents;
• high-value dealers;
• casinos;
• art market participants;
• crypto-asset exchange providers; and
• custodian wallet providers.

The Regulations apply to the conduct of relevant persons and impose obligations in relation to risk assessments, implementing appropriate policies and procedures and knowing their customer, among other things.  Regulated firms will also have to address guidance given by their regulators.

Schedule 9 of POCA sets out those that are in the Regulated Sector. These also have an obligation to report suspicions or knowledge (subjective or objective) of money laundering under criminal penalty.

The Senior Management Arrangements, Systems and Controls section of the FCA Handbook imposes additional obligations on financial institutions to ensure directors and senior managers have practical responsibility for organising and controlling the firm’s affairs in accordance with FCA principles.

Non-regulated businesses, although not under an obligation to implement AML measures, may nevertheless consider it prudent to put measures in place to mitigate AML risk. Non-regulated businesses can commit the substantive money laundering offences and the ‘prejudicing an investigation’ offence under POCA. Section 332 of POCA also creates an additional ‘failure to disclose’ offence for nominated office of non-regulated businesses; however, the offence only applies if a nominated officer has actually been appointed. Liability only attaches to a nominated officer and not to other employees. The offence is not committed unless the nominated officer has actual knowledge or suspicion of money laundering.

15. Must payment services and money transmitters be licensed in your jurisdiction? Are payment services and money transmitters subject to the AML rules and compliance requirements?

United Kingdom

Payment service providers are required by the Payment Services Regulations 2017 to be registered and authorised by the FCA.

Money transmitters or money service businesses are required by the Regulations to be registered and authorised by the FCA.

Payment service providers and money transmitters are covered by Regulation 8 of the Regulations, as expanded by the definitions in regulations 10 to 14, and are ‘relevant persons’. As such, they are subject to the AML rules and compliance requirements.  

16. Are digital assets subject to the AML rules and compliance requirements?

United Kingdom

The Regulations apply to cryptoasset exchange providers and custodian wallet providers.

Cryptoassets are defined in Regulation 14A(3)(a) as ‘a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored or traded electronically’.

Cryptoasset exchange providers are those firms that provide the following services:

• exchanging cryptoassets for money;
• exchanging one cryptoasset for another; and
• operating a machine that uses automated processes to exchange cryptoassets for money or vice versa.

Custodian wallet providers are those firms that keep and administer cryptoassets, or provide cryptographic keys, on behalf of their customers.

The FCA is the regulator for all cryptoasset businesses in the UK.

17. What are the specific AML compliance requirements for covered institutions?

United Kingdom

The Regulations require covered institutions to undertake an assessment of the money laundering risks posed by their business and to have in place policies controls and procedures proportionate to these risks.

At the commencement of a business relationship, covered institutions are required to undertake customer due diligence. This entails:

• Identifying the customer and verifying that identity; and
• Assessing the purpose and intended nature of the relationship.

For corporate customers, institutions must obtain and verify the name of the corporate, its registration number and the address of its registered office or principal place of business.

For corporate customers other than those listed on a regulated market, institutions must take reasonable steps to determine the law to which the corporate is subject as well as the full names of its board of directors. They must also identify the beneficial owner of such a customer.

The measures taken above must be commensurate with the risk faced by the institution and simplified due diligence will be justified by a lower level of risk. Conversely, a higher level of risk requires enhanced due diligence. In particular, enhanced due diligence must be performed where:

• a business relationship is entered into with a person established in a high-risk third country (schedule 3ZA to the Regulations sets out these countries and is amended from time to time);
• a correspondent relationship with a credit institution or a financial institution is entered into;
• the customer is a politically exposed person (or a family member or known close associate of a politically exposed person); and
• the transaction is complex or unusually large, has an unusual pattern or seems to have no apparent legal or economic purpose.

Covered institutions are required to cease doing business with customers that cannot be identified and that pose an unacceptably high level of risk.

Businesses in the Regulated Sector are required under section 330 of POCA to report to the authorities any knowledge or suspicion of money laundering.

Institutions covered by the Regulations are required to retain records of information obtained during the customer due diligence process for a period of at least five years after the end of the transaction to which that process related.

18. Are there different AML compliance requirements for different types of institutions?

United Kingdom

All institutions covered by the Regulations face the same compliance requirements. This includes the requirement to undertake customer due diligence. The degree of the required due diligence depends on the level of risk faced by the institution. This risk may be affected by the following factors:

• its customers;
• where in the world it does business; and
• the nature of its business and how it delivers its products or services.

Institutions that face a low level of risk may undertake simplified due diligence. However, those that face a heightened risk must undertake enhanced due diligence. In particular, enhanced due diligence must be undertaken if:

• a business relationship is entered into with a person established in a high-risk third country (schedule 3ZA to the Regulations sets out these countries and is amended from time to time);
• a correspondent relationship with a credit institution or a financial institution is entered into;
• the customer is a politically exposed person (or a family member or known close associate of a politically exposed person); and
• the transaction is complex or unusually large, has an unusual pattern or seems to have no apparent legal or economic purpose.

19. Which government authorities are responsible for the examination and enforcement of compliance with the AML rules?

United Kingdom

The bodies responsible for supervising compliance with the AML rules are specified in Regulation 7 of the Regulations. There are a number of supervisors and not all are government departments.

Regulation 7 states that the FCA, HMRC, the Gambling Commission and 25 other professional bodies (set out in Schedule 1 to the Regulations) act as supervisory authorities under the Regulations.

The OPBAS was set up in 2018. This body sits within the FCA and its objective is to improve the consistency of professional body AML supervision. It has the power to ensure that the professional bodies set out in Schedule 1 to the Regulations meet the standards required by the Regulations.

20. Are there requirements to monitor and report suspicious activity? What are the factors that trigger the requirement to report suspicious activity? What is the process for reporting suspicious activity?

United Kingdom

There are a number of reporting requirements under POCA.

Those in the regulated sector have an obligation to report suspicions or knowledge (subjective or objective) of money laundering under criminal penalty. Under section 330 of POCA, any person in the regulated sector can commit an offence of failing to make a required disclosure to a nominated officer or to the UK’s Financial Intelligence Unit (the NCA), if:

• they know or suspect, or have reasonable grounds for knowing or suspecting, that another person is engaged in money laundering;
• the information on which the knowledge or suspicion is based (or which gives rise to reasonable grounds for such) came to them in the course of a business in the regulated sector; and
• they are able to identify the other person or the whereabouts of any of the laundered property, or they believe, or it is reasonable to expect them to believe, that the information will or may assist in identifying that other person or the whereabouts of any of the laundered property.

The disclosure, made via a Suspicious Activity Report (SAR), must be made as soon as practicable after the information or grounds for belief came to them.  No offence is committed if there is a reasonable excuse for not making the disclosure, or the information came to a legal adviser or relevant professional adviser in privileged circumstances.

Under section 331 of POCA, a nominated officer, usually the money laundering reporting officer (MLRO), commits an offence if they fail to inform the NCA of disclosures received under section 330 of POCA, where they know or suspect, or have reasonable grounds to know or suspect, that another person is engaged in money laundering.

In practice, a person in the regulated sector is expected to be subject to an AML policy that requires suspicions to be escalated to the MLRO. The MLRO will then consider matters by reference to CDD materials and other information, and then decide whether to file a SAR.  

Section 332 of POCA creates an additional ‘failure to disclose’ offence for nominated office of businesses operating outside the regulated sector; however, the offence only applies if a nominated officer has actually been appointed. Liability only attaches to a nominated officer and not to other employees. The offence is not committed unless the nominated officer has actual knowledge or suspicion of money laundering.

21. Are there confidentiality requirements associated with the reporting of suspicious activity? What are the requirements? Who do the confidentiality requirements apply to? Are there penalties for violations of the confidentiality requirements?

United Kingdom

It is a ‘tipping off’ offence under POCA either to disclose that a SAR has been made, or to disclose the existence of a money laundering investigation (whether such investigation is being contemplated or being carried out), in a manner that is likely to prejudice any investigation arising from the SAR (section 333A of POCA). This offence applies to the regulated sector only and there are some limited carve-outs.

It is also an offence (inside or outside the regulated sector) to make a disclosure that is likely to prejudice the investigation, or to falsify, conceal, destroy or otherwise dispose of documents relevant to the investigation or cause or permit another person to do so, knowing or suspecting that an investigation is under way or planned (section 342 of POCA). It is a defence to show that they did not know or suspect that the disclosure was likely to prejudice the investigation.

Regulation 66 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 empowers a supervisory authority to require a copy of any SAR that has been filed with the NCA.

22. Are there requirements for reporting large currency transactions? Who must file the reports, and what is the threshold?

United Kingdom

The Regulations do not contain specific requirements for keeping a record of or reporting large currency transactions.

23. Are there reporting requirements for cross-border transactions? Who is subject to the requirements and what must be reported?

United Kingdom

No, there is no specific obligation to report cross-border transactions.

24. Is there a financial intelligence unit (FIU) or other government agency responsible for analysing the information reported under the AML rules?

United Kingdom

The UK Financial Intelligence Unit is independently located within the National Economic Crime Command as part of the NCA.

25. What are the penalties for failing to comply with your jurisdiction’s AML rules, and are they civil or criminal?

United Kingdom

A breach of the Regulations may attract a financial sanction from the relevant regulator in such amount as considered appropriate, or a breach may receive a censure in the form of a statement published by the regulator. Civil measures may also include: removing ‘fit and proper’ status from an individual; suspending a firm or individual from undertaking regulated activities; and refusing, suspending or cancelling a business’ registration or authorisation. A regulator can also impose a temporary or permanent prohibition on an individual having a management role within a relevant legal person. An injunction may also be obtained in the High Court where there is or may be a breach of a relevant requirement.

In some instances, a breach is a criminal offence and the offence can be committed by a person or a corporate (eg, breach of a relevant requirement under the Regulations).

Offences under the Regulations are punishable with a maximum penalty of two years’ imprisonment and/or an unlimited fine for individuals, and an unlimited fine for corporates.

Where a corporate has committed an offence and it can be shown that it was committed with the consent or connivance of an officer of the corporate, or the offence can be attributed to any neglect on the part of an officer, the officer as well as the body corporate is guilty of the offence. The maximum penalty in each case is two years’ imprisonment or an unlimited fine, or both.

Regulators may also sanction firms or individuals by reference to other regulatory rules that are in place, for example, the Financial Conduct Authority’s Principles for Businesses.

26. Are compliance personnel subject to the AML rules? Can an enforcement action be brought against an individual for violations?

United Kingdom

Compliance personnel are subject to the Regulations. Breach of the regulations may cause the regulator to remove ‘fit and proper’ status from an individual, suspend that individual from undertaking regulated activities or prohibit the individual from having a management role within a relevant legal person.

In some instances, a breach of the rules is a criminal offence and this can be committed by a person or a corporate. Where a corporate has committed an offence and it can be shown that it was committed with the consent or connivance of an officer of the corporate, or if the offence can be attributed to negligence on the part of the officer, the officer as well as the body corporate will be guilty of an offence.

27. What is the statute of limitations for violations of the AML rules?

United Kingdom

There is no statute of limitations for violation of AML rules. The Regulations provide at Regulation 86 that a failure comply with obligations under the Regulations can be a criminal offence.

Under UK criminal law, there is no limitation period for the prosecution of offences, save in respect of summary-only offences (which are offences triable only in the magistrates' court, the lower criminal court).

28. Does your jurisdiction have a beneficial ownership registry or an entity or office that collects information on the beneficial ownership of legal entities?

United Kingdom

A beneficial ownership register called the register of Persons with Significant Control (PSC) was created in 2016. The PSC register is publicly available at Companies House. At its inception, concern was expressed about the accuracy and reliability of the information held within this register. The Regulations have since been amended to introduce a requirement on institutions covered by the Regulations to notify the Registrar of Companies of any material discrepancies in the register. This amendment comes into force in April 2023. There is currently proposed legislation before the UK Parliament that empowers Companies House to verify the identity of the officers and beneficial owners of companies.

In August 2022, the Register of Overseas Entities came into being. Overseas entities that own property in the UK are required to apply for inclusion on this register. In so doing, they are also required to disclose their beneficial owners.