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UK ‘must maintain anti- money laundering drive’

The UK must avoid diluting its anti- money laundering (AML) standards in the post-Brexit period in order to win trade deals, says a panel of MPs.

The Treasury Select Committee (TSC) has published its report on economic crime – Anti-money laundering supervision and sanctions implementation – whose findings include the following:

  • The UK needs a more precise estimate of the scale of economic crime in the country, which is anywhere from “tens of billions” to “hundreds of billions” of pounds.
  • The UK government should review AML supervision more regularly, with a single supervisor of the 25 UK bodies that enforce AML rules. This could create a role for the newly-announced Economic Crime Strategic Board, jointly chaired by the chancellor of the exchequer and the home secretary.
  • The UK must not compromise in the fight against economic crime to secure trade deals post-Brexit. The anticipated increase in trade with non-European Union (EU) countries will increase the risk that UK businesses will encounter markets with lower AML standards.
  • Her Majesty’s Revenue & Customs (HMRC) should require all estate agents to be registered with them for AML purposes, to ensure that any proceeds from corruption aren’t stashed in property.
  • Companies House, where new firms are registered, needs powers to ensure it plays no role in assisting those involved in economic crime.
  • The government is criticised for failure to reform the corporate criminal liability framework for economic crime.

Resisting pressure

“With the uncertainties of Brexit around the corner, the government should regularly review the UK’s effort to combat money laundering to ensure a constant stimulus to improve,” said TSC chair Nicky Morgan.

“The government must ensure it does not bow to buccaneering deregulatory pressures and maintain its intentions to lead in the fight against economic crime.”

“Leading that fight is going to require focus. The Government needs to bring greater order to a fragmented supervisory system, better identify the scale of the problem, and make a greater effort to combat the known risks and gaps in the supervisory system.

The report stresses that despite the challenges of Brexit, the UK must work to keep the financial sector “clean” to match its ambitions to continue to be a leader in global financial services.

It also recommends that the fight against economic crime should not focus its attention too much on Russia, despite the “malign influence” on the UK financial system from certain elements of Russian money.


This item appears in the following sections:
Fraud Prevention
Anti-Money Laundering Fraud Prevention
Region
Europe
Risk Management
Financial Risk Management

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