The UK has voted to leave the EU. It may be that the UK – with other non EU countries, such as Guernsey – will decide to keep the provisions of MLD4. Or it may be that it will decide on different legislation. I could imagine execution of the beneficial ownership register – the PSC register – will be a hot debate.
As will the transposition of the Fourth Money Laundering Directive into UK legislation – deadline 26 June 2017 – is however in doubt, as the UK government has yet to speak on what it will do about EU legislation that is only partway through the transposition process.
This leaves financial institutions guessing for sure. For many financial institutions this will surely add another layer of complexity to the management of their multi-jurisdictional AML programs.
At the World Economic Forum, David Cameron said: “It is worth asking the question: who would be happy if we left? Putin would be happy. I suspect al-Baghdadi would be happy.” Cameron has previously argued that staying in the EU is vital for Britain’s security as it enables greater sharing of intelligence across the bloc.
Rob Wainwright, the director of Europol, has also said leaving the EU meant the UK would risk losing access to a vital European security database used by British police every day. Brexit “has the potential to harm the UK’s ability to fight terrorism and crime, because of the extent to which police co-operation information systems and other capabilities in the EU have become embedded in the [British] police community and, to a lesser extent, the intelligence community”.
One such database the British police use is the EU’s Schengen information system (SIS) every day to check for leads about criminal suspects. The Schengen information system (SIS) is a vast database of 64m pieces of information (known as alerts), used by 29 European countries.
Of course, one can argue that many of the structures created to combat financial crime and terrorist financing are themselves global and are thus unrelated to EU membership, among these is the Financial Action Task Force (FATF). There will certainly be an impact, it is just a question of how big or small.
Submitted by Paul Hamilton