Research and analysis

Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds: RPC Opinion

Regulatory Policy Committee policy opinion on HMT's amendments to the Money Laundering, Terrorist Financing and Transfer of Funds

• From: Regulatory Policy Committee
• Published: 14 July 2022

Documents

RPC Opinion: Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds

PDF, 168 KB, 11 pages

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Details

The proposed regulations amend the current Money Laundering Regulations (MLRs) to ensure that they remain effective and proportionate, and that the UK remains compliant with international standards.

The RPC considers the impact assessment to be not fit for purpose. The department has not sufficiently addressed the concerns raised in the RPC’s initial review notice. The IA has not provided a proportionate assessment of direct impacts to businesses nor robust justification for non-monetised impacts. The IA has not considered whether small and micro businesses (SMBs) could be disproportionately impacted by the proposal. Therefore, the RPC is unable to validate the EANDCB and does not consider the IA as fit for purpose. 

The RPC also finds weaknesses in the IA’s consideration of the cost benefit analysis in that the department must provide further details on the data limitations and consider the use of previous MLR IAs or proxies to inform the cost estimates. It is unclear how the department has used the consultation to fill evidence gaps and improve the robustness of the EANDCB estimate. There are also weaknesses identified by the RPC in relation to wider impacts, specifically the IA should provide stronger evidence to support this claim and a more comprehensive assessment of impacts on innovation, trade, and competition.

The RPC publishes its opinion to assist parliamentary scrutiny of the bill.

The IA and associated documents can be found here.

Published 14 July 2022