Is the UK the Money Laundering Capital of the World?

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Is the UK the Money Laundering Capital of the World?

A new investigation has revealed that the UK is a hotspot for money laundering, with an estimated £90 billion laundered each year through the City of London alone. In this article, risk and compliance experts Intelligencia Training share further insight.

In late September 2020, a major leak known as the ‘FinCEN Files’ exposed the UK’s significant role in facilitating global corruption and money laundering.

A subsequent investigation by a global consortium of investigative journalists highlighted the need for improved defences in the UK financial sector and a reform of its red tape approach to compliance.

As a result of the leak of law enforcement data, global banks have come under increased scrutiny from the Financial Conduct Authority (FCA) who state the quality of anti-money laundering controls is persistently falling short.

The FinCEN Files revealed that global banks had transferred a staggering $2 trillion (£1.6 trillion) in suspected ‘dirty money’ over the last two decades. Commenting on the leak,

Mark Steward of the Financial Conduct Authority said:

“What surprises me still is there is a view in some quarters that anti-money laundering systems and controls is a lot of money for nothing in return, and it’s a huge bureaucratic exercise in red tape rather than something that’s really important.”

He further added the FCA have a number of cases in the pipeline and no major bank in Britain hasn’t been or isn’t currently subject to an ongoing investigation.

The scrutiny of money laundering and anti-money laundering regimes isn’t something new to the UK. Following a report on economic crime last year, a Treasury committee said the true scale of the problem was unknown, with particular areas of weakness including property and online transactions.

The report called on the UK government to regularly review efforts to minimise money laundering and it should not compromise in its provision in the face of post-Brexit trade deals.

Adding to the report, Ben Wallace, Minister for National Security, said:

“It is wrong to think of money laundering as a victimless crime. Those with dirty cash to clean don’t just sit on it, they reinvest it in serious organised crime, from drug importation to child exploitation, human trafficking and even terrorism.”

Intelligencia Training, who recently began delivering the first apprenticeship programme specific to the role of Risk and Compliance Officers working in financial services, emphasise that investment into effective training and qualification progammes is crucial if the UK is to combat its money laundering problem.

A spokesman from Intelligencia Training commented:

“The delivery of training in this subject area has already proved successful in enhancing the knowledge and skillset of those involved in anti-money laundering and as technology evolves and we enter an age of digital money and payments, it is critical, now more than ever, to ensure parity of skills across sectors.”

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