Gordon Brown Outlines New Anti-Money Laundering And Terrorist Financing Measures

by Robin Pilgrim, LawAndTax-News.com, London

14 February 2006

The UK's Chancellor of the Exchequer, Gordon Brown, on Monday set out new measures to further strengthen the financial system's ability to deny terrorists funds, identify and investigate terrorist networks and disrupt terrorist activity through swift, pre-emptive strikes.

In a speech on national security - which has divided observers, as it appears to be stretching his remit as Chancellor somewhat - to the Royal United Services Institute (RUSI) in London, Mr Brown explained that:

"We need not only to deny a safe haven to terrorists, but ensure there is no hiding place for those who finance terrorism. Since 2001 we have frozen assets of terrorists of nearly £80 million - including for over 100 organisations with links to Al Qaeda. Today I am announcing new measures to prevent terrorist financing, identify suspicious transactions, and disrupt terrorist activity."

The Chancellor has also written to the Financial Action Task Force (FATF) - the international standard-setter on counter-terrorist finance issues - requesting that the UK assumes the Presidency of FATF in 2007.

Among the proposals unveiled by the Chancellor yesterday were:

• A joint review with the Home Office of how best to root-out terrorist abuse of the charitable sector and protect donor confidence;
• New proposals to strengthen safeguards introduced after September 11th for "Money Service Businesses" - and thereby protect the integrity of global remittance flows;
• New guidance to help firms target their efforts to detect terrorist financing on the areas of highest risk and ensure that senior managers in firms take responsibility for the financial crime risks that they face;
• A new dedicated forum bringing together Government and the financial services sector to identify and challenge terrorist threats; and
• Strengthening the Treasury's asset-freezing operation, through greater joint working with other departments and agencies in order to disrupt terrorist networks when they come to light.

This follows the recent publication by the Joint Money Laundering Steering Group (JMLSG) of new guidance on the prevention of money laundering and the financing of terrorism for the financial services industry.

The JMLSG comprises the leading UK trade associations in the financial services industry. Its aim is to promulgate good practice in countering money laundering and terrorism financing and to give practical assistance in interpreting the UK Money Laundering Regulations 2003 and money laundering aspects of the Proceeds of Crime Act 2002.

The revised JMLSG guidance aims to:

• Allow firms to focus their resources on the minority of customers who represent a higher risk;
• Reduce the documentation needed to verify the identity of non-personal customers;
• Simplify the document requirements by which most individuals have to 'prove' their identity;
• Encourage wider use of electronic means of verification of identity;
• Reduce unnecessary duplication of identity checks; and
• Provide additional guidance, tailored to particular business areas, to take account of special features in a number of sectors.

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