In the current whirlwind of political and economic certainty, good news can slip under radar. But, it is certainly welcome to note that the UK has been recognised for putting up an effective fight against financial crime.
A report from the Financial Action Task Force (FATF), published last month, said the UK was leading the world in its efforts and was given the highest possible rating.
Although FATF said more resources – both human and IT - were required, there was also fulsome praise in regards to how the UK handles financial crime, commenting that:
“The UK aggressively pursues money laundering and terrorist financing investigations and prosecutions, achieving 1,400 convictions each year for money laundering.
UK law enforcement authorities have powerful tools to obtain beneficial ownership and other information, including through effective public-private partnerships, and make good use of this information in their investigations.”
Examples of best practice include the UK’s Joint Money Laundering Intelligence Task Force, which encourages information sharing across the public and private sectors to combat financial crime. Furthermore, there is approval of the Office of Financial Sanctions Implementation, which was established in 2016 to ensure sanctions are properly understood, implemented and enforced.
Areas of progress
- The National Economic Crime Centre has recently opened and sits within the National Crime Agency (NCA). It has a budget of roughly £6 million and has employed 55 people from various agencies including the NCA, Serious Fraud Office, HMRC, the FCA and the City of London Police. Within this new agency, there is also scope to involve members of the private sector such as those from accounting firms. The NCA will be able to direct the Serious Fraud Office (SFO) to conduct investigations, although the SFO is retained as a separate entity which is answerable to the Attorney-General’s office.
- In November, the government published the Serious and Organised Crime Strategy, which includes an investment of at least £48 million over the next 18 months, with work channelled through a range of government departments and overseen by anti-corruption champion, John Penrose MP.
- The Criminal Finances Act of 2017 is now in force and brings new powers for enforcement agencies to recover criminal funds. They also introduce unexplained wealth orders, which are issued by courts, with the first subject being identified as Zamira Hajiyeva.
- A new specialist financial crime unit last October will target bank accounts associated with prisoners with the aim of freezing these and initiating criminal proceedings against those involved. It is a core part of targeting the so-called kingpin criminals and gangs who have made fortunes through drug dealing
- The unit, announced by Justice Secretary and Lord Chancellor David Gauke MP is based in Peterborough and will use specially trained prison and police officers who will monitor bank accounts for signs of suspicious transactions.
Mr Gauke said: “My message to kingpins is this: we are already blocking your phones, putting you in isolation and now we will make sure you can’t access your money. Dealing drugs in prison will no longer be profitable because we will find your assets and we will seize them.”
The war continues
The UK’s approach may be achieving recognition for progress and indeed, placing a higher priority on financial crime, However, despite the government emphasising that it is boosting resources, there is certainly no need for complacency.
The overarching infrastructure may be improving, but the UK has a vast financial services sector and standards are certainly not all high, with too many still reliant on outdated systems and insufficient expertise to manage the risks.
There is undoubtedly still plenty of illicit money flowing through the UK and while the FAFT report is good news, risk managers still face considerable challenges in this area.