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UK’s “£100 billion” dirty money problem must be confronted following international review

7th December 2018, London – A new review published today by the Financial Action Task Force (FATF) of the UK’s anti-money laundering is no cause for complacency over the UK’s ongoing role as a safe haven for corrupt wealth.

The UK Government has received the most favourable assessment to date in a review of its anti-money laundering measures by FATF, the global money laundering standards body. However, the report fails to take into account ongoing failings in the UK system which – according to the National Crime Agency – allow in excess of £100 billion in illicit funds to impact the UK each year.

The FATF report states the UK’s system for ensuring professionals follow money laundering rules is “highly effective”. Our own research contradicts this assessment, identifying the need for a major overhaul of how the private sector’s money laundering standards are overseen. This includes low levels of sanctions against those found to have weak systems to defend against dirty money.

Importantly, the report does raise a number of other significant concerns:

1. UK firms turning a blind eye to dirty money face little prospect of criminal conviction for allowing dirty money into the UK financial system. This is in part due to the UK’s hesitancy to introduce a failure to prevent economic crime offence

2. FATF questions whether the UK’s efforts on tackling high end money laundering are equivalent to the threat – only 0.8% of all dirty money investigations relate to this.

3. Whilst the UK was recognised as a global leader in corporate transparency, FATF highlighted that the accuracy of the company ownership register was undermined by a lack of verification on information submitted to it. This system is vulnerable to abuse by money launderers. Last year research by TI-UK found 766 UK companies involved in corruption and money laundering schemes amounting to £80 billion.

 Duncan Hames, Director of Policy at Transparency International UK, said:

“We commend the efforts the UK Government has made in recent years to achieve the results in this assessment, but this is no time to rest – these measures must now be properly resourced and enforced with criminal sanctions if the UK is to meet the scale of the problem of dirty money. Comparing favourably to other countries should be considered in a global context where – as the Danske Bank case showed – anti-money laundering standards remain low.”

“UK regulation of the private sector’s AML obligations is still weak, fragmented and lacking credible deterrent. The Government should introduce the long-promised corporate liability laws, to hold businesses to account for their role in enabling dirty money being laundered through the UK. Consistent inaccuracies in the UK’s company ownership register are a stark reminder that without proper resourcing, otherwise strong initiatives can be circumvented. Companies House should be empowered to verify the data that is put into this register.”

“FATF observed the UK’s poor track record in seizing the assets of corrupt individuals. Good intelligence, sufficient police resources and new tools such as Unexplained Wealth Orders will all be necessary to turn this around.”

***ENDS***

Contact:
Dominic Kavakeb
Dominic.kavakeb@transparency.org.uk
020 3096 7695 07545 965 302

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Read 105 times Last modified on Friday, 7 December 2018 13:57

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