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International AML Framework and Regulations
Global standards: Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
FATF has developed 40 FATF Recommendations, which ensure a co-ordinated global response to prevent organised crime, corruption and terrorism. They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes. There are more than 200 countries and jurisdictions committed to implementing the Recommendations.
FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity. FATF monitors countries to ensure they implement the FATF Standards fully and effectively by a process of Mutual Evaluation Reviews, and holds countries to account that do not comply.
Members in the Channel Islands or Isle of Man are not subject to UK legislation, but must signify that they are aware of the legislation on AML passed in their respective jurisdiction, e.g. Guernsey or Jersey, as appropriate.
All businesses that accept cash payments of 15,000 Euros or more, or the equivalent in any currency including sterling, or are of a designated type (see below for further information), are required to comply with legislation regarding the prevention of money laundering and terrorist financing (ML/TF) further to the requirements of the Proceeds of Crime Act 2008 (POCA) and the Terrorism and Other Crime (Financial Restrictions) Act 2014.
The relevant secondary legislation was last updated via the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 [SD 2019/0202], which came into operation on 1st June 2019, and by the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 [SD 2019/0219], and Anti-Money Laundering and Countering the Financing of Terrorism (Specified Non-Profit Organisations) Code 2019 [SD 2019/0200], that both also came into operation on the same date. In December 2019 the Anti-Money Laundering and Countering the Financing of Terrorism (General and Gambling) (Amendment) Code 2019 [2019/0457] was made which amends SD 2019/0202 and SD 2019/0219.
People's Republic of China
The PRC Anti-Money Laundering Law and the PRC Counter-Terrorism Law systematically sets out anti-money laundering requirements for all financial institutions established within the PRC and certain non-financial institutions that have AML obligations.
The People's Bank of China as the primary regulatory authority of AML issues, has promulgated various regulations and rules that stipulate specific AML requirements of reporting entities in conducting their business (e.g. the Measures on the Administration of the Customer Identity Verification and the Identification and Transaction Document Keeping by Financial institutions).
The China Banking & Insurance Regulatory Commission and the China Securities Regulatory Commission as the regulators of banking, insurance, and securities sectors, respectively have also published rules that impose specific AML requirements on financial institutions regulated by these organisations (e.g. the Implementation Measures of the AML Work in Securities and Future Sectors).
The United States of America has federal anti-money laundering laws and 38 of the 50 US states have AML laws. Some of these state regimes merely establish reporting requirements, while others either mirror federal law or, in some cases, are more stringent than federal law.
During the 1990s, a series of AML laws were enacted to strengthen the AML regime. The most significant of these laws was the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001 ('the Patriot Act'), which was passed into law in the immediate aftermath of the 11 September terrorist attack. The Patriot Act amended The Bank Secrecy Act (BSA) in order to strengthen the government’s ability to prevent, detect and prosecute international money laundering and the financing of terrorism.