Annual remittances from the UK stand in excess of £15 billion with up to 65% flowing to developing countries. The UK has one of the largest money transfer markets in Europe and the largest number of money transfer operators (MTOs).

Globally, some major banks are withdrawing bank accounts from MTOs because of the reputational and regulatory concerns. A number of UK banks have recently chosen to close accounts for a number of money transfer companies which has resulted in concerns being raised about the continued viability of remittance flows to a few developing countries, including Somalia.

The Government are acutely aware of the importance of remittances to these countries and to UK residents. The Government are committed to doing the utmost to ensure that remittances continue to flow through secure, legitimate channels.

We recently asked our officials to convene stakeholders to discuss possible actions the Government could take. A round table was held at the Department for International Development (DFID) on Friday 27 September 2013. The round table was co-chaired by senior officials from HM Treasury and DFID. It was attended by Government, the money transfer industry, NGOs and international organisations.

The purpose of the round table was to agree a set of actions to be taken by Government, supervisors and industry to promote a safe, secure and compliant UK money transfer sector that continues to support legitimate remittances while maintaining effective measures against money laundering and terrorist financing.

As a result of this meeting, and the continued cross-Government effort to find solutions, the Government can today announce a range of actions which they are committed to taking forward. These actions include:

The UK Government will form an action group on cross-border remittances, which will include relevant stakeholders.

The action group will draft guidance on applying a risk-based approach to anti-money laundering and countering the financing of terrorism when banking money transfer companies.

The National Crime Agency will provide more detailed and specific risk assessments and alerts about the sector to banks and money transfer companies, to help differentiate the risks involved in dealing with different money transmitters.

DFID will take forward a pilot project to help develop secure remittance channels to Somalia.

HM Revenue and Customs (HMRC) will increase “days of action” with law enforcement and the number of risk-targeted supervisory visits they undertake to provide further confidence that non-compliant money transmitters are being required to improve or are removed from business.

HMRC will also provide further training to money transmitters to help them achieve an effective level of compliance.

The full list of Government and supervisor actions with respective timelines has been placed in the library of the House.

Securing a sustainable future for the UK remittance market will require all of the stakeholders to work together. The Government remain committed to playing their part in this and we hope these clear actions will be a key step in the right direction.