Bloomsbury Professional catch up with PSL and author, Richard Powell.
1. What do you find rewarding about the role of a PSL?
As a PSL you are responsible for supporting fee earners' legal and technical knowledge. That means keeping abreast of a constantly changing legal environment, and financial services changes more than most other sectors. This can be quite demanding but it means that you see law and regulation developing and are constantly having to ask what's the impact on clients and what colleagues need to know to best advise them.
2. What do you think the major challenges of Brexit will be to banking and finance?
The principal challenge at the moment is uncertainty. It's not clear to what degree UK businesses will have access to the Internal Market post-Brexit. This means that firms are having to plan on a worst case scenario. An example, is contract continuity, where firms carrying on regulated activities are asking whether agreements will remain valid or become unenforceable post-Brexit. Absent political agreement between the UK and EU-27, it's vital to develop mitigation strategies and work-arounds.
3. What are the main changes brought about by 4mld/5mld?
There's quite a lot packed into both directives. 4MLD brings the EU's AML framework up to date with international standards, particularly with the Financial Action Task Force's 2012 recommendations. A risk-based approach - that is to the risk posed by money laundering and terrorist financing - should now be central to every business's approach to customer due diligence and ongoing monitoring. Every regulated business will need to identify and assess in writing the risks to which they are subject. Transparency on beneficial ownership is another major change. 4MLD introduced on an EU-wide basis corporate and trust registers of beneficial ownership. 5MLD, a response to the terrorist attacks in Paris and Belgium of late 2015 and the Panama Papers scandal, widens public and industry access to these registers.
4. What country do you think has the most effective anti-money laundering regulations and why?
According to the Basel AML Index, Finland has the best/lowest AML risk with a score of 3.04. But that is not say its regime is the most effective. The UK has a higher score of 4.81 (coming 118th out of 146 countries), but as its national risk assessment acknowledges, London's openness and status as a global financial centre exposes it to significantly higher illicit financial flows. Despite the UK having a robust regime, its habit of gold plating (e.g. "DAML" formerly known as the Consent regime) and the multiplicity of supervisors (25) and guidance, leads me to prefer Singapore (another international financial centre), which has a score of 4.83. This regime benefits from a strong emphasis on law and enforcement accompanied by dissuasive penalties.
Richard Powell is one of the editors of the International Guide to Money Laundering Law and Practice.