What are the legal implications of Brexit on anti-money laundering laws?
The UK government has yet to specify any significant changes in the AML starting from 2021. We know that the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) and AMLD5 are the benchmarks for these legal proceedings. British corporations have also relied on their EU membership to monitor the illegal exchange of financial assets.
Yet, some of these protocols will get altered in the coming years.
In this article, we discuss the legal implications of Brexit on anti-money laundering (AML) compliance.
Amendments in the AML Framework
At present, The Money Laundering Regulations will continue to serve as the primary resource for anti-money laundering cases.
However, some amendments will be made regarding the UK’s status as a third country for the EU. That means the UK will no longer receive any advantages during UK-EU money laundering cases.
Here are some things to consider:
1.Financial Action Taskforce (FATF)
The UK will remain a FATF member and adhere to its rules and regulations.
2.6th Anti Money Laundering Directive (AMLD6)
English courts will not incorporate the 6th Anti Money Laundering Directive (AMLD6). It feels that the current laws and clauses are taken from AMLD5 already cover the essential aspects of anti-money laundering rules.
3.EU as a Third Country
All EU nationals within the UK and internationally have now become third-country entities. Due to this, British companies are advised to manage financial transactions with these individuals according to third-country rules and regulations. It is the only way to maintain AML compliance during business operations.
Overall, these changes might seem small compared to other legal implications of Brexit. Yet, we suggest that you review and revise EU-based contracts to ensure that they align with the new rules.
Interaction in UK vs. EU AML Approach
Currently, the UK and EU governments perceive money laundering as a criminal act. They aim to ‘support international efforts’ and abide by FATD rules to penalise money launderers. Their similar approach and mutual opinion on the matter can mean overlapping in the regulations and protocols followed by both governments.
However, a slight difference may emerge post-Brexit. These include the third-country status and new rules concerning UK-EU trade. These changes indicate the need for due diligence and awareness. It is why commercial and private corporations should stay up to date with new developments in all financial and legal matters. Having a better understanding will enable them to make practical and compliant decisions when they transfer funds across the border.
Your Next Step
In conclusion, leaving the EU has created a ripple effect in the corporate world. When in doubt, you must seek legal consultation to ensure that everything is in order. We can assess your current AML policies and make amendments wherever required.
Do you want to know more? Get in touch for further details.