After the UK left the EU, The UK passed the Sanctions and Anti-Money Laundering Act 2018 for money laundering and terrorist financing arrangements in relation to economic and other sanctions. This law has been enacted to comply with United Nations obligations or other international obligations, advance the prevention of terrorism, identify money laundering activities, and comply with Financial Action Task Force (FATF) standards.
The main reason for this law to come into force in the UK is that the UK has left the European Union. If the United Kingdom did not take any measures on money laundering and terrorist financing after leaving the European Union, it could violate international AML obligations. To this end, the UK Government passed the Sanctions and Anti-Money Laundering Act 2018 law. With the launch of SAMLA, the UK aims to continue to meet the obligations of UN sanctions and to continue using government sanctions as a tool to achieve foreign policy goals. This law also has legislation for the UK on economic, commercial, and immigration sanctions.
The sanctions are a key foreign policy and national security tool for the UK. The new law will allow the UK to act in line with its own interests and international collaborators. Thus, this situation is expected to be improved by law in the UK. The law was published in 2018, but it did not go into force at that time, so the law had to be completely separated from the European Union for the law to take effect.
SAMLA aims to support the government, in line with UN sanctions and in accordance with the sanctions of individuals, institutions, and individuals, and even to support individuals and institutions implementing such sanctions. The law gives the government a lot of power to enforce these sanctions, and one of its powers is enforcement against human rights violations. The government also gained the power to introduce new legislation on money laundering and the detection and destruction of terrorist financing. Except for the laws of the UK government, it should continue to comply with international AML standards issued by the Financial Action Task Force (FATF).
The UK Government will not be able to set financial sanctions targets for the first time due to the powers granted by SAMLA. Due to these new provisions, the pressure on financial service providers is expected to increase by the government. With the SAMLA law, the Government will be able to press the UK Overseas Territories, such as the Cayman Islands and the UK Virgin Islands, to create transparent public registries for beneficial owners of organizations in their jurisdiction. As a result, the UK's national financial crime framework is developing. If these public registers happen, they will challenge attractive tax havens for financial criminals who want to hide the fortunes of the UK Overseas Territory. Some of SAMLA's broad powers to the Minister of Foreign Affairs and the Treasury include: Making efforts to prevent the spread and use of weapons and mass destruction materials, promoting the dignity of democracy and the rule of law, protection of civilians in conflict zones, etc.
In accordance with the European Union Financial Sanctions Regulation, some businesses, such as auditors and tax advisors, have been extended the scope of the SAMLA reporting requirements specified in the sanctions legislation. Such businesses in the UK have to report to the Financial Sanctions Implementation Office (OFSI). For risky people who have been determined in the arrangements made within the scope of reporting obligations, informing an authority on the specified issues and also keeping records of certain transactions, requesting the persons described to the competent authority to provide information, examining and copying the prescribed information and related powers. The law ensures that arrangements are made to enforce specified obligations. These regulations can create criminal offenses, such as up to 10 years in prison.
Despite the broad powers of this Law to the government, the Ministerial freedom of separation from European practices in relation to sanctions and money laundering will depend on the final agreement with the European Union. As a result, it should be said that some aspects of this legislation are controversial, which has caused many controversies. Although SAMLA is considered more extensively than the existing EU legislation, the UK government has expressed its willingness to continue collaborating with EU members and other international partners after Brexit has been finalized.
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