Is the government doing enough to tackle dirty money?

Anti-corruption campaign group Transparency International has criticised Sajid Javid and Philip Hammond’s new Economic Crime Strategic Unit.

Javid and Hammond held the first meeting of the unit this week. The board includes banking CEOs and representatives of accountants, estate agents and solicitors. No anti-corruption NGOs were invited to the meeting and none will sit on the board.

While Transparency International (TI) welcomed the unit being set up, they said that the unit underestimated the problem of corruption and had not dedicate enough money to fighting it.

While the government say there is £14.4 billion worth of economic crime, TI says this just relates to fraud and tobacco smuggling.

The National Crime Agency estimates that £100 billion of illicit funds impacts the UK each year and TI said it was concerned “such a low assessment fails to properly understand the problem of dirty money flowing into the UK”.

In a statement, TI continued:

“Likewise the promise of £3.5 million to reform the mechanisms for how the private sector report activity involving suspected money laundering is unlikely to be enough to fix a system that is both out-of-date and failing to identify corrupt funds being laundered into and using key sectors such as property, law firms and banks.

To be successful in making a dent in economic crime, TI said the taskforce will also need to:

• Introduce real corporate transparency at home and abroad – ensuring Companies House can effectively police abuse of UK companies and that transparency in the British Overseas Territories is both timely and thorough.

• Address the role of private sector ‘enablers’ in corruption and supporting the introduction of laws that criminalise the failure to prevent money laundering.

TI also said it hoped the taskforce would be transparent, publishing its minutes, agendas and objectives, so it can be held accountable.

Rachel Davies Teka, Head of Advocacy at Transparency International UK, said:

“It’s welcome news that the Government remains behind the agenda of ending the UK’s role as a safe haven for corrupt money and that two important Departments are working together to this end. It’s worrying that in this announcement the Government has cited a figure which only relates to fraud and tobacco smuggling. Having a realistic understanding of the scale of the problem will enable policy makers to allocate proportionate resourcing to addressing the problem.”

“If this taskforce is to have a real impact it should aim to achieve wholesale, cross-departmental changes and address the key areas of weakness in the UK’s current fight against dirty money. This should include ensuring there is accurate data in the public domain on the ownership of UK Companies and those in the British Overseas Territories and Crown Dependencies as well as addressing the role of UK professionals who are complicitly or unwittingly involved in money laundering”

“We also hope that this taskforce will be fully transparent in its activity and therefore accountable to the public. This is a good initiative but it’s worth will only be dictated by how well it ultimately performs in cracking down on economic crime.”

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