UK still central to global money laundering schemes, despite positive evaluation from international financial watchdog.
The Financial Action Task Force has released its evaluation of the UK’s anti-money laundering and counter terrorist financing efforts, the first such review since 2007.
Tom Keatinge, Director of RUSI’s Centre for Financial Crime and Security Studies said:
‘The UK has achieved top-of-the-class marks from the FATF – government officials will be both surprised and relieved. However, the fact that the UK remains central to global money laundering schemes brings into question the relevance of this evaluation. Furthermore, we have cause to question some of the findings in the report, in particular, the assessment in relation to the effective use of financial intelligence by UK law enforcement.
‘Whilst the UK scores highly in most categories--notably its work to counter terrorist financing -- worrying gaps exist, in particular as relates to the capacity and capabilities of the UK’s Financial Intelligence Unit and the ability of the authorities to conduct systematic and strategic assessments of the UK money laundering threat.
‘With the evaluation now complete, there is an open strategic question as to how the UK will tackle the weaknesses highlighted by the, particularly the question of resourcing an adequate criminal justice response. The recently published Serious and Organised Crime Strategy is long on ambition but much of its content is aspirational and will require a significant investment of funding and resources.
‘Despite the blizzard of initiatives (such as the Joint Money Laundering Taskforce and National Economic Crime Centre) launched over the past few years, government cuts have taken their toll. For too long the UK has been more effective at taking money off its law enforcement agencies than taking money off criminals. This has to change if the fight against economic crime is to advance meaningfully.’
Since its formation in 2014, RUSI’s Centre for Financial Crime and Security Studies has closely tracked the activities of the FATF in general and the UK’s preparation for its evaluation in particular:
- In 2015, in two separate reports CFCS reviewed the outlook for the UK’s FATF evaluation and the key issues that presented vulnerabilities as the government prepared for the assessment of its AML and CTF frameworks. To read the RUSI Commentary click here, for the Whitehall Report, click here.
- Looking at the situation before the referendum CFCS argued that even in the case of Brexit, FATF will play an important role for the UK.
- In November 2017 CFCS examined how the UK’s National Risk Assessment on Money Laundering and Terrorist Financing has been shaped by preparations for the 2018 FATF Evaluation.
- In August 2018 CFCS argued that the reforms introduced by the UK in advance of the FATF evaluation could strengthen the role of ‘Global Britain’.
- In October 2018 CFCS argued that the UK has used the two years leading up to the evaluation wisely, and compares and contrasts this with neighbouring countries.
Centre for Financial Crime and Security Studies