There are those who see government as a soft touch when it comes to financial crime. Judging by recent moves however, it certainly seems determined to dispel such accusations, which means the year ahead could be a particularly unwelcoming one for criminals.
There are changes taking place on a number of fronts and risk managers will want to ensure they keep up to date as further announcements are expected in the coming months.
So, what is happening?
The new National Economic Crime Centre will open
The NECC, which will be within the National Crime Agency, will act as an overseer with emphasis on money laundering and people trafficking, co-ordinating responses from the various agencies.
The Serious Fraud Office is staying
The SFO focuses on the most serious cases but had been blamed for being ineffectual for a number of years and the government had said it faced closure. However, it has sharpened up its act considerably, resulting in more high profile prosecutions, including against Barclays Bank and four of its former directors. There has now been agreement that the SFO should remain as an independent investigator, although it will also receive instructions from the new NECC where applicable.
The Office for Professional Body Anti-Money Laundering Supervision will launch
OPBAS will be launched in 2018 and will act as a ‘supervisor of supervisors’ to ensure that AML rules are being properly applied by 22 legal and accounting professional bodies. It will be hosted by the Financial Conduct Authority and will also aim to improve knowledge sharing.
A range of AML legislation enacted
This includes the Sanctions and Anti Money Laundering Bill, which seeks to create a post-Brexit framework and aims to allow the UK to continue to implement and maintain EU law imposed by sanctions regimes. It will also give the UK independence to decide how to respond to future events.
Meanwhile, the Criminal Finances Act came into force in 2017 and introduces new criminal offences where a company fails to prevent tax evasion. The act makes companies liable for failing to prevent their employees from facilitating tax evasion, removing the need to prove there was a ‘directing mind’ at the top of the organisation.
This Act also introduces new sections in the Proceeds of Crime Act 2002 and will allow enforcement authorities to apply to the High Court to make an ‘unexplained wealth order’, which means an individual must give information about how they obtained assets.
Under the spotlight
In a further move, The Law Commission is reviewing the law on confiscation under the Proceeds of Crime Act to try and improve the process for obtaining and enforcing confiscation orders.
In another, broader development, the government is also considering whether the UK needs a new law that would make companies accountable for financial crime and would mean they would face prosecution if they fail to prevent fraud and money laundering.
"The weaknesses in our current law result in other jurisdictions holding British companies to account when ours has not. Our current system of limited corporate liability incentivises a company’s board to distance itself from the company’s operations," said Robert Buckland, the solicitor general.
It was said a change in the law would mean the UK would gain more similarities with the US, where companies are more directly responsible for workers’ actions.
This is at an early stage - more legislation will require detailed work, but the fact it is being discussed, shows the commitment to tackling financial crimes in all its forms, whether corruption, bribery, fraud or money laundering and for those engaged in financial crime, there is no doubt a colder wind is blowing.