Ending the UK’s role as a safe haven for kleptocrats’ dirty money
When the corrupt and criminal from across the world look to launder, spend, store or stash their ill-gotten gains, the UK is often their destination of choice. UK property and UK registered-companies have become attractive vehicles for money launderers, a process which is facilitated by groups in regulated sectors, such as bankers, lawyers and accountants, who face too few consequences for their own criminality or complacency.
This situation has not gone unnoticed. The FinCEN Files, which leaked documents from the US Treasury’s Financial Crimes Enforcement Network, named more companies from the UK than any other country in the world, and revealed that the US Treasury considers the UK a ‘higher risk’ jurisdiction for laundering dirty money. With the National Crime Agency estimating that money laundering costs the UK more than £100 billion each year, the costs are not only reputational.
Allowing these problems to continue seriously weakens the UK’s business environment, compromises national security, and diminishes the UK’s credibility when holding kleptocrats around the world to account. The UK Government has shown willingness to address these issues, but actions speak louder than words; prioritising legislative time for reforms is essential if there is to be any meaningful progress on tackling economic crime and dirty money in the UK.
The UK Government should:
Stop the abuse of UK companies for economic crime by legislating for proposed Companies House reforms, which will strengthen its ability to monitor, verify, and investigate suspicious companies.
Ensure parliamentary time for the Register of Overseas Entities Bill to create a register of foreign companies owning UK property and protect the UK’s property market.
Reform the UK’s outdated corporate liability laws, including the identification doctrine, and introduce a failure to prevent economic crime offence to ensure that all companies can be held to account for corruption, money laundering, and fraud.
Comprehensively review the UK’s Anti-Money Laundering regime to ensure it is fit for purpose.
Deliver the commitments made in the UK’s Economic Crime Plan.