The prime minister says the United Kingdom will not extend the Brexit transition period. The UK is leaving transition on 31 December 2020, with or without a deal. London lawyers have questioned whether intelligence sharing has become a political bargaining chip in ongoing negotiations. The City of London is asking whether Brexit risks making the UK’s money laundering fight harder. If we don’t share information with our neighbours, it will be more difficult to detect and prosecute financial crime.
Intelligence sharing by law enforcement across borders is just one aspect of the immediate choice facing the UK in tackling financial crime. More fundamentally, the UK must now decide whether to follow the US approach to financial sanctions, stick with the European Union’s priorities, or go it alone.
The Sanctions and Anti-Money Laundering Act 2018 is the vehicle which the UK must use to plot its future course in sanctions and anti-money laundering.
Without the anti-money laundering act, the UK would have no mechanism for keeping pace with fast-changing events. The Brexit debate did not dwell on the implications for sanctions and anti-money laundering regimes in the UK. Nevertheless, the UK had come to depend on the EU as providing the mechanisms for imposing sanctions, and for providing the conduit for international standards in anti-money laundering to be brought into UK law.
An early clue as to how the anti-money laundering act may be used is seen in the detail of the UK’s post- Brexit sanctions against Russia. There are early signs of the UK adopting a subtly different approach from the EU in its treatment of certain Russian- owned entities. The new law includes the Magnitsky amendment, which was a late change, allowing the UK to impose sanctions on those who commit human rights violations.