Annual global illicit money flows are counted in trillions of US dollars and the new UK Anti-Money Laundering (AML) Action Plan is a part of the international ‘direction of travel’ in tackling money laundering. “The international community has made the fight against money laundering and terrorist financing a priority,” notes the International Monetary Fund (IMF).
Consecutive EU Money Laundering Directives have broadened the scope of sectors of business captured by the AML regulations; and increased the breadth and depth of requirements to manage the risk of businesses being used to facilitate money laundering.
Following the recent terrorist atrocities in France and Belgium, and a recommendation from the Financial Action Task Force (FATF), the EU is to bring forward the timetable for member states to implement the recommendations of the latest Money Laundering Directive.
The Panama Papers have revealed to all how global money laundering can be conducted and, in particular, can be aided by those based in financial centres such as London. London is the largest global centre for cross-border banking and UK efforts to manage AML risks are central to the international effort.
Although no reliable statistics exist of the amount of money laundered in the UK, the Director General of the National Crime Agency (NCA) has repeatedly stated that the figure runs to “many hundreds of billions.” In its most recent serious and organised crime threat assessment the NCA states, in relation to money laundering, “its sheer scale presents a strategic threat to the UK’s economy and reputation.” The latest NCA report on Suspicious Activity Reporting (SAR) shows a continued increase in SARs reporting.
The UK AML regime was recently reviewed by the IMF and in 2017 the UK AML framework is due to be further reviewed by FATF. In 2015 the government published the first UK national risk assessment of money laundering and terrorist financing.
The Directors of the Financial Conduct Authority (FCA), National Crime Agency and Serious Fraud Office have all indicated an intention to enhance general enforcement efforts, with the FCA, in particular, focussing upon enforcement to provide a ‘credible deterrence’ to money laundering. In May the FCA published its report on the de-risking phenomenon which has swept the banking sector over the past few years. The report attempts to bring balance to the fight against money laundering.
Very recently the Prime Minister announced the creation of a multi-agency taskforce, with substantial new funding, to tackle economic crime, including money laundering.
It is against this international backdrop that the UK government has published, in April 2016, its first AML Action Plan along the lines of the Anti-Corruption Action Plan published in 2015. The AML Action Plan has four themes:
- Stronger public / private partnership
- Strengthen enforcement
- Reform the supervision regime
- Increase the UK’s reach to tackle money laundering
Even if the government only succeeds in implementing some of the 19 action points contained within the four themes, the UK will become a little harder for the corrupt and dishonest to clean their stolen trillions.