On 13 March 2025, HM Treasury published its 12th annual report on anti-money laundering and counter-terrorist financing (AML/CTF) supervision, covering the period from 6 April 2023 to 5 April 2024. The report offers a comprehensive overview of the UK’s efforts to combat financial crimes, detailing the activities of 25 AML/CTF supervisors, including the Financial Conduct Authority (FCA), His Majesty’s Revenue and Customs (HMRC), the Gambling Commission, and 22 legal and accountancy professional body supervisors.
Key Highlights from the Report
- Risk Assessment and Registration Supervisors received 13,058 applications for supervision during the reporting period. Approximately 9% of the supervised population was categorised as high-risk. The FCA received 275 applications for AML/CTF supervision (including crypto assets) and approved 154, with rejection numbers up from previous years.
- Common Non-Compliance Issues Supervisors identified several common areas of non-compliance among firms, including: Ineffective business-wide risk assessments Inadequate customer risk assessments Enhanced due diligence (EDD) measures that were not risk-sensitive Poor compliance monitoring Inadequate customer due diligence (CDD) procedures No ongoing CDD monitoring No periodic review of compliance with money laundering regulations Inadequate firm-wide risk assessment No or inadequate staff training on AML compliance Inadequate record keeping Use of third-party policies that were not adequately tailored to the specific firm’s individual risk profile Inadequate resources allocated to AML compliance
- Enforcement Actions Total fines amounted to £41.5 million, with £26 million levied by the FCA. This is a significant decrease compared to nearly £300 million in fines during 2022-23, a fluctuation often attributed to large-scale actions in previous years. The FCA undertook 15 formal actions and 118 informal ones during the year.
Ongoing and Future Initiatives
- Economic Crime Plan 2023-26: The government remains committed to delivering the Economic Crime Plan, which outlines actions to enhance the effectiveness of the AML/CTF regime.
- Potential Reforms: HM Treasury is considering reforms to the UK’s AML/CTF supervisory framework, with options ranging from enhancing the Office for Professional Body Anti-Money Laundering Supervision’s (OPBAS) powers to consolidating supervisory bodies.
- Preparation for FATF Evaluation: The UK is preparing for its next Financial Action Task Force (FATF) evaluation, scheduled for publication in 2028, which will assess both technical compliance and the effectiveness of AML, CTF, and counter-proliferation financing measures.
What this report demonstrates to us, is the UK’s dedication to strengthening its AML/CTF framework, addressing identified weaknesses, and enhancing the effectiveness of its supervisory regime to combat financial crimes effectively.
