The idea of establishing an advisory committee on UK Money Laundering policy was first suggested by the Treasury in 2001. It had been noted that it would be useful to have a strategic-level forum in which those with an interest in the UK's anti-money laundering regime could discuss topical issues and pass the views of those they represent to Government. In this way, the Treasury would be able to canvas opinion from a broad range of interested parties before formulating policy advice to Ministers. While the Treasury's relations with stakeholders in the financial crime field have always been positive, the Committee would allow for a more co-ordinated approach.
The Committee would also serve as a discussion forum that would inform Treasury's recommendations to Ministers on whether to approve industry produced guidance notes. Under the Proceeds of Crime Bill, a court must take into account whether an individual followed approved guidance notes when making decisions in relation to suspected money laundering. Following the Cruickshank Report, it has become important to include the views of consumers when approving the notes. The Committee would allow for a co-ordinated gathering of views before the Treasury submitted the notes for approval by a Minister. Further details on guidance notes can be found in discussion paper three.
The membership was therefore determined in order to maximise the range of views and interests represented, including those of law enforcement, Government, industry, industry regulators and consumers.
A letter was sent to potential interested parties from Ruth Kelly, (the Economic Secretary to the Treasury) on 26 July 2001, asking for comments on a draft terms of reference for the Committee. The Treasury received 16 responses, all of which welcomed the formation of the Committee and many of which offered comments on its membership and objectives. These were taken into consideration in the preparation of revised terms of reference, which were sent out for comments on 21 January. Following further revision, terms of reference for the MLAC are attached below for discussion.
Structure of the MLAC
Membership
The proposed membership is detailed below. We have deliberately sought to recruit groups who can represent a cross-section of views and cover as many different stakeholders as possible. The Consultative Committee of Accountancy Bodies, for example, represents the interests of six different Accountancy trade associations and should be able to gather detailed feedback from its varied membership.
We have generally approached trade associations, although many of those who will attend will be experienced practitioners. However, the strategic focus of the MLAC should be maintained and the Treasury would encourage the formation of working groups for more detailed discussions of practical issues.
Working Groups
While the MLAC itself will discuss issues at a broad, strategic level, it may be necessary to form working groups to discuss the more operational details. As an example, the MLAC might discuss such issues as "Does the UK's anti-money laundering regime strike the right balance between regulation and security?" Detailed issues, which might include "How can the UK ensure compliance with FATF Special Recommendation 7 on wire transfers" would be discussed by a working group. A working group might also be formed to consider the UK's implementation of the EU Second Money Laundering Directive.
How do members wish to approach the issue of working groups?
Procedure
In order to ensure that discussions at the MLAC do not become too bogged down in practical details, it will be important that the Committee is well managed, with papers circulated well in advance and a clear agenda for discussion decided before each meeting.
The Treasury will manage the MLAC from within its Financial Crime Branch. It will ensure the timely circulation of papers, take minutes of the MLAC meetings and distribute them promptly afterwards.
Timing
The MLAC will meet every six months, with the possibility of ad hoc meetings where necessary.
1. The overall aim of the Money Laundering Advisory Committee (MLAC) is:
2. The MLAC will focus on the following objectives:
a. Enabling better co-ordination and coherence of the UK's anti-money laundering regime;
b. Reviewing the efficiency and effectiveness of the UK's anti-money laundering strategy, taking into account the potential costs and benefits;
c. Providing a forum in which key stakeholders can comment and advise on the appropriate UK response to international anti-money laundering developments;
d. Examining industry produced guidance notes and making recommendations prior to submission for government approval.
3. The MLAC will enable all voices to be heard by bringing together representatives from Government, law enforcement, trade bodies and industry representatives, regulators, and consumer representatives.
4. The MLAC will have regular bi-annual meetings, but will retain flexibility to meet on an ad-hoc basis as and when the need arises.
5. The MLAC may form standing or ad-hoc sub-groups to discuss more specific issues. The membership of these sub-groups will reflect the issues discussed and, where appropriate, may involve organisations that do not take part in the main MLAC meetings.
6. The MLAC will be chaired by a senior HM Treasury official.
MEMBERSHIP