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The Integrated Review offers an opportunity to reposition economic crime as a ‘whole of system’ responsibility rather than a domestic one.
The Integrated Review offered illicit finance watchers, both inside and outside the UK government, a ‘crocus of hope’ that the government of Boris Johnson may yet have grasped the importance of tackling the UK’s problem with dirty money. Although ‘actions not words’, as the strategy itself notes, will be the real test, the mere inclusion of illicit finance as a foreign policy concern has the potential to have real-world impact, as pointed out in our colleague Tom Keatinge’s recent analysis.
This cautious optimism should also extend to those more concerned with tackling its impacts closer to home. Although, by their nature, such reviews are predominantly outward looking, the Integrated Review notably drew on issues more traditionally confined to domestic policymaking; the reference to issues such as fraud against UK citizens and UK corporate registry reform within national security policy seemed inconceivable even just a few months ago.
This is perhaps more reflective of a flag-waving tone from the top, rather than any major paradigm shift in defence and security thinking in the UK. Nevertheless, the admission that what happens at home matters with respect to the UK’s ability to act and influence globally on illicit finance (and vice versa) is an important one. And while the Integrated Review remains light on new initiatives in this area, breaking economic crime out of its domestic box could prove a decisive moment for this issue’s standing in the competitive Whitehall marketplace.
Cultivating for the Future
However, a dedicated effort is needed to turn these green shoots of optimism into a flourishing new future for economic crime policy. Policymakers will be required to take the kernels of good ideas scattered throughout the Integrated Review’s ‘Strategic Framework’ and grow them for the future.
Taking these in order, the objective to sustain ‘strategic advantage through science and technology’ recognises that while the growth of the digital age offers economic opportunities, these can only be capitalised upon if 'citizens feel safe online and confident that their data is protected’. In this way economic crime policymakers would do well to emphasise that the main threat those very citizens feel is from the increasingly sophisticated cyber-enabled frauds which have become a depressing feature of everyday life. It will be essential to ensure that senior figures in the new Cyber Defence Force, a joint venture between the Ministry of Defence and GCHQ established in 2020, appreciate the scale and impact of the UK’s endemic fraud problem. Furthermore, using the content of the Integrated Review to fight for a greater place for fraud in the 2021–26 iteration of the National Cyber Security Strategy is also an opportunity not to be wasted.
Second, on reading the detail of the second objective to shape ‘the open international order of the future’, those of us tracking the progress of the UK government’s delivery of the Economic Crime Plan 2019–22 were heartened to see its mention as an important component of protecting the UK’s ‘open, resilient, global economy’. The recognition that the risks inherent in having an open economy need to be offset by a ‘whole of system’ response to the bad money that flows with the good is long overdue. Importantly, this provides an opportunity for those shaping the next iteration of the Economic Crime Plan to ensure that the hitherto largely absent intelligence and diplomatic community has a greater role in the future; as the Integrated Review states it: ‘the document is intended as a guide for action for those responsible for aspects of national security and international policy across government’.
Furthermore, the recognition of the need to tackle the longstanding stain on the UK’s global reputation of the high levels of corruption proceeds sequestered in the UK’s high-end property market, provides an opportunity to make a stronger case for greater investment in delivering the UK’s Asset Recovery Action Plan.
Finally, a real opportunity for the economic crime agenda lies under the third objective to strengthen ‘security and defence at home and overseas’ with its strong focus on serious and organised crime (SOC) as a threat to the UK and its citizens. It is in here where a subtle but decisive step-change appears to have occurred. Whereas the nature of the SOC threat was previously viewed broadly through the prism of a street-level ‘drugs and thugs’ threat, the government machinery now seems to have been alerted to the more hidden, but arguably more insidious, serious organised economic crime threat.
The noted intention to ‘bolster our response to the most pressing threats the UK faces from organised crime, including economic crime, illicit finance and fraud’ offers a useful opportunity to elevate economic crime’s visibility within the broader SOC response and with it take its rightful share of the specialist operational resources hitherto reserved for tackling drug gangs and people smugglers.
Moving Up a League
In conclusion, although illicit finance and economic crime were never going to play a starring role in such a broad-ranging and comprehensive review of the national security and foreign policy landscape, the peppering of the issue throughout the Integrated Review demonstrates that the message is getting through. Importantly, this offers some opportunities to reposition the UK’s economic crime response as a ‘whole of system’ rather than a largely domestic, criminal justice issue.
Economic crime policymakers, however, are used to operating on a very different playing field; one on the margins, with fewer spectators and dominated by the home team. The Integrated Review has the potential to change all of that by widening the pool of players available to sub into the ‘game’. But this can only occur if the team steps up; and it matters that it does. Domestic criminal justice reforms will only have so much effect in a world of globalised, digitally enabled crime. And closer to home, getting the future funding of the UK-based response right will have ramifications for the UK’s reputation as a serious player in the fight against global illicit finance; in that respect, the Integrated Review could provide useful leverage in the internecine battleground of the next spending round negotiations. In short, it is time for UK economic crime policy to move up a league.
The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.
Senior Research Fellow
Centre for Financial Crime and Security Studies