Brexit ‘could hamper financial crime prevention’

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The UK referendum decision to end the country’s membership of the European Union (EU) will potentially see Brexit have an impact on financial crime prevention, it is warned.

The outcome will see the UK start a period of negotiation with the EU, notes Dean Curtis, managing director at LexisNexis Risk Solutions UK. “Whatever the conclusion it is important that focus is maintained on the critical need of international collaboration in anti-money laundering (AML), counter-terrorism financing (CTF) and tax crime controls,” he comments.

“Any discrepancies between the UK’s and EU’s measures in preventing financial crime could have a variety of impacts on the economies of all the current EU member states. Any fragmentation of standards or best practice in relation to financial crime prevention will incur significant technological and operational costs for British financial institutions, due to the need to manage parallel UK and EU AML control frameworks.

“The Fourth EU Anti-Money Laundering Directive, which is expected to come into force next year, aims to support a consistent and transparent approach to AML and CTF practices across the EU. Any divergence of UK and EU AML practices however could delay the effective implementation of the Fourth EU Directive, thereby increasing the risk of criminal activity.

“Despite the period of change, the continuous efforts to drive the momentum required to strengthen AML practises should continue to be a priority with collaboration and alignment not just across the EU but the world, helping to create financial inclusion and financial transparency that will benefit all nations.”

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