UK ANNOUNCES NEW WEAPON IN THE FIGHT AGAINST MONEY LAUNDERING

Despite increased provisions in the financial services sector, and action from the law enforcement agencies, there is still billions of pounds being laundered each year in the UK. The profits from drug dealing and human trafficking alone are projected to reach £90 billion in 2017. This figure will be swelled by other offences predicate to money laundering: such as tax evasion, fraud, bribery and corruption. Considering these figures, Home Secretary, Amber Rudd has said even more needs to be done to beat financial criminals.

A newly formed National Economic Crime Centre (NECC) was announced on Monday 11th December 2017, with the mission ‘to crack down on money laundering’. The NECC adds to the bodies already committed to this mission, such as the NCA, FCA, SFO, OPBAS and JMLIT.

Commenting on the objectives of the NECC, The British Home Office stated, “(the NECC) will use intelligence and analytical capabilities from government, law enforcement and the private sector to tackle high level fraud and money laundering.” National Crime Agency (NCA) Deputy Director, Nigel Kirby said, “Together we will make the UK a hostile environment for serious and organized criminals involved in economic crime”.

The UK government has also launched a new anti-corruption strategy for the period 2017 to 2022. This latest move takes a hard-line on corruption, with one of its stated aims, “(to target) corrupt insiders”. Mrs Rudd has said, “Since 2010 the UK has arguably done more than any country in the world to fight corruption. We have a strong legislative framework through the Bribery Act and now the Criminal Finances Act. We are the first G20 country to establish a public register of domestic company beneficial ownership (known as the People with Significant Control or PSC Register), and the first G7 country to undergo an IMF fiscal transparency evaluation”. Furthermore, as one of six anti-corruption priorities, the Home Office is committed to “strengthening the integrity of the UK as an international financial centre”.

This new wave of anti-corruption thinking within the British Government demonstrates a renewed appetite to tackle a persistent problem. An overseas companies beneficial ownership register (which was in the pipeline following the FATF 2012 recommendations) now looks likely to be introduced. It will create transparency in overseas companies owning or buying property in the UK, or wishing to bid for government contracts, who will be required to reveal their ultimate beneficial owners.

The UK is also increasing its efforts to co-operate internationally. In December 2017, the UK and US co-hosted the first Global Forum on Asset Recovery, focusing on accelerating asset recovery across borders.
These extra initiatives add to the headway already made in recent years. In 2017 the OECD review of the UK’s anti-bribery regime welcomed the “strong anti-corruption drive” and concluded that the UK had made significant progress in fighting foreign bribery. Transparency International has commended the UK as one of only four countries worldwide that actively enforces foreign bribery legislation, and ranks the UK joint tenth in the least corrupt countries in the world.

Mrs Rudd has also upped the ante on cracking down on economic crime that threatens British citizens, a responsibility of the law enforcement agencies and the financial services sector. Firm’s must keep updated and robust processes in place to protect their customers. Those who do not will come under scrutiny from the regulator. There is no doubt that this renewed interest will see a new wave of enforcement. Action will be taken against those breaking the law as well as those allowing their organisations to be used for financial crime through lapse systems and controls.

RFS Financial Crime can help review your firm’s systems and controls, including AML risk assessments and policies; making sure that your provisions are proportionate and up to regulatory rigour. We can carry out a robust gap analysis and develop pragmatic remediation plans, including staff and senior management training, an essential tool on the path to compliance.