Money Laundering & illicit finance
By the National Crime Agency
Money laundering underpins and enables most forms of organised crime, allowing crime groups to further their operations and conceal their assets. Although there are no exact figures there is a realistic possibility that the scale of money laundering impacting the UK annually is in the hundreds of billions of pounds.
Money laundering has the potential to threaten the UK’s national security, national prosperity and international reputation
The threat from money laundering
The critical importance of the financial sector to the UK’s economy means that money laundering, particularly high-end money laundering (the laundering of large amounts of illicit funds through the financial and professional services sectors) can threaten the UK’s national security and prosperity, and undermine the integrity of the UK’s financial system and international reputation. We are focused on tackling illicit finances derived from criminal activity at home and abroad.
The UK benefits from an active and dynamic business environment, supported by a limited number of restrictions on establishing a business. The ease with which a company can be established is frequently exploited by criminals who set apparently legitimate companies both within UK and offshore, but which are primarily a mechanism for laundering illicit funds.
The property market is another route exploited by criminals, particularly in London. Money laundered in this country is often the proceeds of crime generated in another country; large financial centres are attractive destinations or transit points for the proceeds of crime.
Large volumes of criminal money flowing through the UK could result in criminal and regulatory penalties being imposed by UK, EU and US authorities. This could in turn lead to the withdrawal from the UK, or potential collapse, of major financial institutions.
Virtually all high-end money laundering schemes, and several cash-based ones, are facilitated by the abuse of legitimate processes and services. Accounting and legal professionals, and estate agents, can be criminally exploited – this is sometimes complicit, sometimes negligent, and sometimes unwitting – and this small minority of people can pose a very significant threat. They can act as intermediaries and use their skills, knowledge and abilities to draft documentation, disseminate funds, and allow highly complex structures to be created that move and store large amounts of criminal money and conceal ownership effectively.
We want to make the UK a hostile environment for money laundering by:
- targeting individuals engaged in money laundering with a view to securing their prosecution and conviction, and disrupting their techniques
- recovering and confiscating assets (see ‘criminal asset denial‘ and ‘civil recovery & tax‘)
- training financial investigators from across UK law enforcement
- making it harder to abuse the UK’s financial system
The NCA proactively tackles illicit finance to deny the assets of politically-exposed persons (PEPs) and corrupt elites of various jurisdictions. We are actively looking at opportunities to use new legislative powers from the Criminal Finances Act 2018; Unexplained Wealth Orders (UWOs) allow recovery of criminal assets, and the NCA has made a number of UWO applications since the provisions came into effect. The NCA has also successfully made a number of Account Freezing Orders to freeze millions of pounds in accounts.
Finance is increasingly global, with money and assets moving quickly between jurisdictions, products and services. The NCA works in cooperation with domestic and international partners to tackle the global threat of money laundering. Private sector engagement is critical to an effective response to money laundering. Working alongside major financial institutions enables us to detect and disrupt money laundering activities in the UK and around the world.
By identifying and arresting money launderers, we are able to disrupt further criminal activity, as well as making the UK a difficult environment for those who seek to use it to launder criminal finances. Working in partnership with other law enforcement and private sector organisations will help us support financial institutions’ own efforts, provide training and insight to help financial personnel to spot the signs of money laundering, and develop new ways to identify and arrest offenders. Recovering and confiscating criminal assets enables us to cut off criminal networks from their money laundering routes.
National Economic Crime Centre
The National Economic Crime Centre (NECC) has been created to deliver a step change in the UK’s response to, and impact on, economic crime. For the first time, the NECC brings together law enforcement and justice agencies, government departments, regulatory bodies and the private sector with a shared objective of driving down serious organised economic crime, protecting the public and safeguarding the prosperity and reputation of the UK as a financial centre.
UK Financial Intelligence Unit
Each member of the EU must have a national Financial Intelligence Unit to comply with EU regulation and international standards. The UK Financial Intelligence Unit (UKFIU) has national responsibility for receiving, analysing and disseminating financial intelligence gathered from Suspicious Activity Reports. SARs are a critical intelligence resource for tackling money laundering, terrorism, serious and organised crime, corruption and fraud.
The UKFIU receives over 460,000 SARs a year. Virtually all of the SARs data is shared with UK law enforcement through a secure channel, enabling visibility of over two million SARs that can be used to deliver impact against crime threats.
International cooperation and partnership is vital to combating money laundering. The UKFIU has a secure network with FIUs throughout the world to receive and share information globally and nationally and works in close partnership with key international organisations to fight money laundering and terrorist financing.
Suspicious Activity Reports – how you can help
If you work in financial services or a related industry and suspect money laundering or terrorist financing you must complete a Suspicious Activity Report. Submitting a SAR protects you, your organisation and UK financial institutions from the risk of laundering the proceeds of crime.
The easiest way to submit a SAR is with the secure SAR Online system. SAR Online is free, negates the need for paper-based reporting, provides an instant acknowledgement and reference number (which manual reporting does not) and reports can be made 24/7. Online reports will also be processed more quickly, particularly if a defence against money laundering is sought.
In certain circumstances there will be a need for reporters within the financial services sector on the sharing of information within the regulated sector under the Criminal Finances Act 2017. In such situations the requesting firms will be required to complete the Required Notification Template and follow the steps to ensure there is absolute security for any information shared.
Joint Financial Analysis Centre
The Joint Financial Analysis Centre (JFAC) is hosted by the NCA and brings together officers, analytical capability, skills and intelligence from four agencies – the NCA, Her Majesty’s Revenue and Customs, the Financial Conduct Authority and the Serious Fraud Office – in a collaborative and innovative working environment. The mission statement for the JFAC is to:
- lead law enforcement’s exploitation of criminal intelligence on economic crime and bulk financial data
In order to:
- produce tactical intelligence to enhance existing investigation and intelligence developments
- identify significant targets for new investigations, produce tactical intelligence packages and make recommendations for further action
- lead the community in developing its strategic understanding of methodologies, vulnerabilities and risks
The JFAC was initially established in response to the Panama Papers leak, however, the ambition and vision has extended beyond that and it has developed into a collaborative unit for wider financial analysis. The four agencies are committed to JFAC becoming the best financial analysis capability that the UK has to tackle economic crime.
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