Risk and understanding

The UK’s first National ML/TF Risk Assessment is “in its final stages” – currently “with ministers” for review – so it will be touch and go on publication before the General Election in May, an HM Treasury senior policy advisor told a London audience in mid-March. [1] A work in progress, the NRA will be “updated from time to time”. Reflecting input by a host of stakeholders from public and private sector, as well as NGOs like Global Witness and Transparency International, the NRA is a synthesised “broad view” of the risks, but the data used in the first iteration is “patchy”, the advisor cautioned; this is a cause for concern given the findings will inform the UK’s Money Laundering Strategy, slated for publication by the end of 2015. The NRA should, therefore, assist firms’ own risk analysis but not be treated as a “one-stop shop”, the HMT advisor stressed. The UK regulated sector may, anyway, have less cause to fear regulatory criticism of its approach to risk in light of the 15% decline in supervisory inspections (a term which covers both visits and desk-based reviews) over the last two years. [2] Firms might also be tempted point to the HM Treasury finding that “the majority of supervisors had difficulty explaining how their assessment of risk translates into the specific monitoring actions they undertook during the year”.