Whose Job is it to Protect the International Financial System?

The enabling role of professional intermediaries – such as legal, accountancy, trust and company service providers (TCSPs) – in modern-day kleptocracies, sanctions evasion and state threats is nothing new. In the globalised economy, kleptocrats and sanctions evaders rely on these professional services providers, or ‘enablers’, to move, hide and legitimise their ill-gotten gains and reputation, rather than carrying suitcases of cash. In the UK, Russia’s full-scale invasion of Ukraine elevated this to a national security priority, and financial centres sit at the forefront.

On the other side of the coin, these same professional services providers serve legitimate functions in the economy. They enable trade, investment and cross-border commerce. According to the Financial Action Task Force (FATF), which sets global standards for anti-money laundering (AML) and counter-terrorist financing, professional services providers are important gatekeepers against financial crime; they must comply with requirements like customer due diligence and support the detection of illicit funds through suspicious activity reports (SARs).

The UK has committed to host an Illicit Finance Summit in December 2026 and, in June 2026, the Centre for Finance and Security at RUSI hosted a cross-sector roundtable discussion among international financial centres (IFCs) – particularly the UK, Crown Dependencies and Overseas Territories – to explore, practically, how gatekeepers can be part of the solution to kleptocracy and illicit finance, rather than the problem.

Supported by the National Endowment for Democracy, the roundtable brought together willing regulators, supervisors, compliance professionals, law enforcement, government, academia and civil society from across jurisdictions. One participant pointed out that this was the first time such a group had come together. The headline was that, despite attempts by the global AML system, political leaders, regulators, firms and law enforcement are pulling in different directions. What have we learnt, where can IFCs move the needle, and what more needs to happen?

Unwittingly Complicit

Gatekeepers are not a single group but diverse firms providing different services, with a variety of sizes and different teams. There is also a spectrum of gatekeeper behaviour ranging from actively complicit, wilfully blind, inadvertently enabling and ethical gatekeeping. Gatekeepers are not homogenous, and neither should the response be. So, what makes gatekeepers do what they do? And why would they want to, have to, and be able to act differently?

On one side of this spectrum of intent, gatekeepers do not exactly get out of bed in the morning wanting to help people commit crimes, but a compliance-based AML approach has not worked, and the message on what they are supposed to do and why has simply not landed. Some supervisors and compliance professionals have tried to persuade gatekeepers to better apply controls by appealing to their personal values and the vivid downstream harm that happens when anti-financial crime controls fail, such as funding a terrorist attack. This approach may land better with some of the gatekeeper population compared to the abstract threat of a distant regulatory penalty.

If gatekeepers are expected to function as a first line of defence, they also need to hear that the system of law enforcement agencies and AML supervisors is listening. Gatekeepers have reported diligently filing SARs or doing their sanctions reporting but hearing nothing back on whether their intelligence was useful (for example leading to red alerts), whether they are compliant or where the risks lie. This can create perverse incentives: firms either de-risk, which can be damaging, or continue working with clients and assume that no news is good news.

While feedback on every single SAR is unrealistic, the failure to create some form of meaningful feedback loop between law enforcement, supervisors and gatekeepers undermines the basic logic of public-private partnership that financial centres’ regulatory models depend on. UK law enforcement has made strides in its public-private partnerships with banks but failed to build trust with other professionals like lawyers. Some IFC governments are working with firms to educate them about corruption risks and red flags, but examples of this are too few and far between.

TCSPs face particular blind spots because they often see only their slice of a complex trust or corporate structure, which is spread across multiple jurisdictions. International standards have historically focused on knowing the customer rather than understanding this full structure, meaning that a TCSP could meet its obligations but unknowingly become one component of a money laundering scheme. This has changed with FATF’s 2021 amendments to Recommendations 18 and 23 that require TCSP groups to undertake group-wide programmes, but it is still uncertain whether these changes will eliminate those blind spots in practice.

Turning A Blind Eye

In the increasingly competitive and commercialised global professional services market, the drive to maximise profits is shaping firm ethics and culture, particularly in the legal sector. When a firm puts profits and clients first, this arguably raises the risk that they will turn a blind eye to dirty money. A sticking point is the stubborn legal grey area where a kleptocrat’s money may not technically be illegal and so, unless gatekeepers are legally required or mandated to do something about this client, it does not get done.

Regulatory enforcement has the potential to change the behaviour of gatekeepers in this middle part of the spectrum of intent, providing it is targeted, has consequences and communicates a clear lesson to the sector as a whole. Regulation means little to firms without the penalty notices and enforcement action to back it. However, supervisory penalties are too inconsistent to teach sector-wide lessons. The UK’s commitment to consolidate AML supervision under the Financial Conduct Authority (FCA), parting with the messy AML supervisory regime across 22 Professional Body Supervisors, offers a window of opportunity to develop a different and better way to go about supervision.

At the political level, the message to gatekeepers on whose money is welcome or not has not been decisive. Russia’s full-scale invasion of Ukraine showed how, when a government sends a clear message, the market will respond. The UK’s Russia sanctions regime led to rapid, coordinated designation and asset freezing, whereby professional service providers acted quickly to unambiguous political signals. However, the post-Russia sanctions rush to exit client relationships had unintended consequences as structures were suddenly left without regulated supervision. It also exposed a deeper problem: firms were encouraged to reject clients because they were subject to sanctions or connected to the Russian state, not because they brought dirty money into the financial system.

The Deliberate Enabler

Where IFCs are left scratching their heads is with the professional enabler who knows exactly what they are doing. This is the lawyer, accountant or other professional intermediary who has decided that the returns of enabling a crime are enough to justify the risk of getting caught. Even when individual professionals or firms want to apply stronger standards, the deliberate enabler will take on the work they decline, whether within the same jurisdiction or in another IFC. These professional enablers will always exist providing the gains outweigh the consequences.

When the rewards outweigh the risks, visible punishment is needed to change these professionals’ mind that enabling is worth it. However, criminal prosecutions of professional enablers are extremely complex and therefore rare, particularly because it is very hard to meet the evidentiary threshold. Despite operational successes by the International Anti-Corruption Coordination Centre (IACCC) against kleptocrats, cross-border law enforcement against enablers has been mostly absent. The UK’s National Security (State Threats) Bill makes it a criminal offence to significantly assist an organisation that is designated for involvement in state threats, which is a sign that policymakers are paying more attention to enablers. Whether this makes a difference will depend on how the powers are actually used.

Working Together As International Financial Centres

Gatekeeping does not stop at the gatekeepers but needs the private sector, government, regulators and law enforcement to move together. No IFC can do this unilaterally. Forums that bring together Financial Intelligence Units and supervisors from jurisdictions with shared characteristics have proven a good mechanism to build a shared strategic picture of what is happening, such as the Quad Island Forum between Jersey, Guernsey, Isle of Man and Gibraltar, which also has a Memorandum of Understanding with the UK. Supervisory colleges that look at TCSP groups operating across multiple jurisdictions are another mechanism for regulators to come together and look at issues around TCSP groups in their jurisdiction. However, cross-border information sharing that is explicitly targeted towards professional enabling is a major gap and, without deliberate attention on gatekeepers, IFCs risk skirting around the issue.

As the UK positions itself as a global leader on illicit finance, and the FATF makes its way through its assessments of countries’ AML/CFT effectiveness, there is an opportunity for IFCs to demonstrate their capability and commitment to protecting the international financial system. This includes building broader and deeper networks between major onshore hubs and offshore IFCs to more explicitly address the role of gatekeepers. Doing so will require thinking creatively about what makes different gatekeepers tick, and where governments, regulators and firms can pull in the same direction – ensuring that the keys to the international financial system are provided only to those with the right intentions.

© RUSI, 2026.

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