Success against economic crime can only be achieved by a public-private partnership. The private sector is the first line of defence, says the Government’s Economic Crime Plan. The document admits that ‘the vast scale of money laundering in the UK represents the illicit proceeds of a range of serious crimes including large scale drug dealing and human trafficking’ and that ‘the volume of fraud is immense and growing’.
The plan speaks of the public and private sector having a ‘joint vision’ to deliver a ‘holistic plan’ to defend the UK from such crime.
The Government announced reform of the Suspicious Activity Reporting (SARs) regime. The big banks Barclays, HSBC UK, Lloyds Banking Group, Nationwide, RBS and Santander UK are spending £6.5m in 2019/20, beside the £3.5 million from the Home Office this year. An international report last year found that the UK’s SARs regime needed a significant overhaul. And last month the Law Commission reported that a significant number of SARs are of low quality and can contain limited, or even no, useful intelligence; and even hinder law enforcement’s ability to investigate and prosecute crime.
Also proposed are reforms to Companies House, to combat economic crimes.
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Chancellor of the Exchequer, Philip Hammond, and Home Secretary Sajid Javid described the plan in a foreword as ‘a step-change in our response to economic crime’. Mr Hammond said: The UK has one of the toughest systems for combatting money laundering, but too many people are still falling victim to fraud. This crime fuels everything from drug dealing to modern slavery, fundamentally undermining people’s faith in our financial system and impacting economic growth. By bringing together leaders from across government, law enforcement and business, we can better tackle the scourge of dirty money, and ensure the UK continues to be one of the safest places in the world to invest and do business.”
In another foreword to the document, Bob Wigley, chairman of the trade association UK Finance, said: “The private sector needs to play their role as good corporate citizens in supporting this plan, as this impacts all of us and the communities we live in. This is not only about sharing information but also bringing private sector expertise. We will need to innovate in the fight against economic crime, because if we do not use technology, we can be sure that the criminals will stay one step ahead.”
For Labour, Anneliese Dodds, Shadow Treasury Minister, responding to the release of the government’s Economic Crime Plan, said: “The government’s Economic Crime Plan is a real disappointment. It re-hashes already announced policies and fails to take on big issues like corporate liability reform. This is hardly surprising given the control that banks have been given over the policy-making process for economic crime, through the ‘Economic Crime Strategy Board’. This disappointing plan follows the route set by the government’s restrictive approach to transparency when implementing the EU’s Fifth Anti-Money Laundering Directive. Given worrying levels of fraud, money laundering and tax evasion, we desperately need a more resolute approach to rooting out economic crime.”
Also published by the Government is a new Asset Recovery Action Plan. Also proposed is a new cryptoassets regime with the UK regulator the Financial Conduct Authority, to respond to the use of crypto-assets in illicit activity.
By economic crimes the document means fraud, corruption and money laundering that (as it points out) enable and fund other crimes such as child sexual exploitation, drug dealing, human trafficking and modern slavery.
