A recently implemented Economic Crime Levy under the U.K.’s Finance Act 2022 is aiming to help in the fight against money laundering.
Details outlined in the final government levy consultation report show that anti-money laundering (AML) regulated entities will first be charged the levy during the year April 1, 2022, to March 31, 2023, with payment due after that year ends starting on April 1, 2023.
The roughly 4,000 AML-regulated entities within the scope of the levy will be organizations with U.K. revenue exceeding £10.2 million (about $10.6 million) per year, which will pay a fixed annual charge of either £10,000, £36,000 or £250,000 depending on the revenue bracket they fall in.
The levy will be collected by the three statutory AML supervisors — HM Revenue and Customs (HMRC), the Financial Conduct Authority (FCA), and the Gambling Commission — “with HMRC also taking on collection responsibilities for the entities supervised by the 22 Professional Body Supervisors (PBSs),” per the report.
According to the government, the levy also aims to raise a “desired” amount of £100 million ($124 million) per year to help fund advanced AML and economic crime capabilities.
In comments emailed to PYMNTS on Monday (April 3), Ted Datta, financial crime compliance expert at Moody’s Analytics, said the new levy “is an important step in unification of the entities involved in the fight against money laundering” and “relevant stakeholders […] being able to better work together to help prevent this illicit activity […] could lead to money laundering being identified at source sooner.”
Datta added that traditional risk assessments often only occur at timely intervals, which gives money launderers more opportunities “to carry out illegal activities without their changing risk level being flagged to compliance teams. They can remain undetected for prolonged periods of time, which threatens the security of all financial institutions.”
Meanwhile, PYMNTS recently reported that Germany is forming a new AML agency, an indication of increased efforts to fight financial and economic crime across Europe.
The new organization, the Federal Authority for Fighting Financial Crime, is expected to absorb the existing national AML authority, the Financial Intelligence Unit, and will be formalized by the introduction of a bill in Germany’s federal parliament in the coming months.
“The aim of the new agency … is to strategically realign the fight against money laundering in Germany,” an unnamed senior official told the FT, per PYMNTS.
For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.