HM Treasury has published ‘Anti-money laundering and countering the financing of terrorism: Supervision Report 2022-23’ which details supervisory and enforcement data for 2022-23, including the number and value of fines issued.

At a glance

The report, which covers the period 6 April 2022 to 5 April 2023, provides information about the performance of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) supervisors.

In 2022, HM Treasury’s (HMT) review of the UK’s AML/CTF regulatory and supervisory regime concluded that significant weaknesses remained and there was a case for further reform. This was acknowledged as part of the government’s Economic Crime Plan 2023-26, which set out a range of actions to improve the regulatory and supervisory regime, including:

  • HMT consulting on, and delivering, an agreed package of changes, to improve the effectiveness of the MLRs and reform the UK’s future AML/CTF supervisory regime.
  • HMT and the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) strengthening their existing oversight of the AML/CTF supervisors.
  • AML/CTF supervisors taking action to make further improvements to their effectiveness.

During 2022-23, there were 5,253 desk-based reviews and onsite visits conducted (2021-22: 7,785). This represents 5.5% of supervised firms being subject to direct supervisory action in 2022-23 (2021-22: 7.7%).

HMRC had 397 full-time employees dedicated to AML supervision in 2022-23, up from 343 in 2021-22. The majority of firms within HMRC's supervised population were assessed as low risk, but roughly 4% of firms and sole practitioners were classified as high risk for 2022-23, with 27% being medium risk.

In 2022-23, HMRC conducted 834 desk-based reviews and 907 onsite visits. 28% of reviews resulted in assessments of non-compliance.

The most frequent forms of non-compliance identified by HMRC included:

Accountancy Professional Body Supervisors (PBSs) reported the most common breaches identified as:

  • Inadequate documented policies and procedures.
  • Inadequate CDD procedures.
  • Inadequate client risk assessment or records.
  • No or inadequate firm-wide risk assessment.

PBSs also found that a lack of knowledge or understanding of the regulations was a common theme among non-compliant firms, or those with poor procedures. This was sometimes due to the size of the firm or its available resources and was often linked to the use of templates or third-party policies without tailoring. Smaller firms and sole practitioners sometimes considered the regulations to be disproportionate.

The table in the Data tab summarises the enforcement activity of the accounting PBSs and HMRC.

Useful guides on this topic

AML: Anti-Money Laundering Zone
AML Zone contains checklists and guidance on the Anti-Money Laundering requirements that businesses need to follow.

AML: Anti-Money Laundering Procedures and Checks
A subscriber guide to Anti-Money Laundering (AML) procedures and checks, including what factors to consider when taking on a new client and conducting your 'know your client' procedures.

AML: Record Keeping
Anti-Money Laundering: what records should you request and retain?

AML: CCAB 2022 guidance for accountancy sector
The Consultative Committee of Accountancy Bodies (CCAB) have published the final version of their AML guidance for the accountancy sector following approval by the Treasury.

Improving the effectiveness of the Money Laundering Regulations
HM Treasury's consultation, 'Improving the effectiveness of the Money Laundering Regulations' explores a wide range of steps for improving the quality of Anti-Money Laundering (AML) due diligence as well as filling gaps in disclosure of trust and land ownership as well as joining up gaps in information sharing. It also includes a survey.

External link

HM Treasury: Anti-money laundering and countering the financing of terrorism: Supervision Report 2022-23