Get a grip on money-laundering, say MPs

Suitcase full of roubles Image copyright Getty Images

The UK’s efforts to tackle money-laundering are “highly fragmented” and need greater focus, an influential committee of MPs has warned.

Companies House and estate agents were the biggest weaknesses in the system, said the Treasury Committee.

It urged the government not to compromise on economic crime in order to secure post-Brexit trade deals.

Committee chair Nicky Morgan said the UK’s departure from the EU would bring “both risks and opportunities”.

But the government should not “bow to buccaneering regulatory pressures”, she added.

The committee said there were two areas of particular concern in the UK’s “fragmented” anti-money-laundering supervision:

  • Estate agents, it said, had been “roundly criticised” for failing to stop the proceeds of corruption being “stashed” in the property sector. It called for every estate agent to be registered with Her Majesty’s Revenue and Customs for anti-money-laundering purposes.
  • New companies were another weak area, since Companies House was not required to carry out money-laundering checks. The committee said it “urgently” needed the necessary powers to combat economic crime.

The committee also suggested changes in the law, including the introduction of a new offence of failing to prevent economic crime and making the “highly fragmented ” supervision system the responsibility of one supervisory body.

Global beacon

The Treasury Committee said increasing trade with non-EU countries would make UK businesses more likely to come into contact with markets that had lower anti-money-laundering standards.

But as well as that risk, there would also be “an opportunity for the UK to be a beacon in the world for the high standards to which we aspire”.

“When conducting trade negotiations, the government must be clear about its intention to lead the fight against economic crime, and not compromise by shifting to a more buccaneering role in an effort to secure trade deals,” it said.

“The government must also ensure that the flow of information between the EU and UK’s enforcement agencies is retained or replicated post-Brexit.”

The committee said the scale of economic crime in the UK was “very uncertain, with estimates ranging from the tens of billions of pounds to the hundreds of billions”.

“The government should provide a more precise estimate, so that the response can be tailored to the problem.”

There is already evidence that London attracts suspected “dirty money” from a number of international sources, including Russia.

The National Crime Agency has estimated that each year, £100bn of dirty money that may be the proceeds of crime is laundered through the City of London.

A government spokesperson said: “There is absolutely no place for illicit finance in the UK, which is why we’ve made targeting economic criminals a priority. We’ve passed legislation on criminal finances and bribery, developed powerful new tools for law enforcement, and created the new National Economic Crime Centre.

“The Financial Action Taskforce, the global standard-setter for counter-terrorist financing, recognised our efforts in December, praising the UK as a global leader that aggressively identifies, pursues and prioritises money laundering investigations and prosecutions.”

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