12th July 2019, London – Transparency International UK is today calling on the Government to urgently strengthen its proposed approach to tackling economic crime.

Today the Government’s Economic Crime Strategic Board (ECSB) – made up of Ministers and senior figures from the private sector – published its economic crime plan, which sets out priorities for law enforcement and legislative reform in this area.

Whilst the plan reaffirms the Government’s prioritisation to tackling economic crime and highlights the important role the UK will play in encouraging transparent company ownership around the world, there are a number of key omissions.

These include:

• A failure to include key next steps on reforming the UK’s corporate liability laws, which currently let big corporates off the hook for serious financial crimes such as money laundering.
• An insufficient response to money-laundering supervisors failing to carry out their duties.
• A lack of safeguards against policy capture in relation to the funding of reforms to Suspicious Activity Reports (SARs). These reports are how the private sector alerts the police to transactions which appear suspicious.

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

“We welcome the Government’s recognition that economic crime should remain a priority in these uncertain times, but in key respects this plan falls short. Whilst there are some promising commitments to reforming the UK’s corporate transparency rules and aiming to promote these as the global standard, there are a number of areas where the Government must go further.”

“After years of inaction, the Government still shows no sign of reforming the Victorian-era principles underpinning the UK’s corporate liability laws which allow big corporates off the hook for turning a blind eye to economic crimes. As a matter of urgency, the UK Government must publish its response to the call for evidence it issued two and a half years ago and should begin the process for the introduction of a new ‘failure to prevent economic crime’ offence.”

“At all costs the Government needs to avoid the perception of policy capture and ensure there is adequate separation of private sector and government decision making. Private companies should not play a major role in shaping the regulations they themselves will be subject to, and then be left to monitor and report their own progress in implementing them. Despite the plan’s shortcomings, there is still time for Government to address these issues: bring forward reforms to corporate liability; get tough on failing supervisory bodies; and ensure policy is made exclusively in the public interest.”

***ENDS***

Contact:

Harvey Gavin
[email protected]
+44 (0)20 3096 7695
++44 (0)79 6456 0340

Notes to Editors: 

Following the 2016 London Anti-Corruption summit, the Government committed to consult ‘on extending the criminal offence of “failure to prevent” to other economic crimes such as fraud and money laundering, however after an initial call for evidence, no further progress has been made.

Currently the law makes it extremely difficult to prosecute large corporates for failing to stop their staff from facilitating economic crimes such as money laundering or fraud, but this proposed change would provide the means to hold company bosses to account for their role in economic crime.