Economic Crime Inquiry: Is the UK making progress in bid to combat AML?

The UK’s Treasury Committee has launched a new inquiry into economic crime, only 19 months after an inquiry by the previous parliament. Following the recent leak of Suspicious Activity Reports (SARs), dubbed the FinCen Files, the Committee is launching a new inquiry to review the progress that has been made in terms of combatting economic crime since the previous one was held.

The first inquiry was held in March 2019, which concluded that the UK’s anti-money laundering (AML) systems were “fragmented”. 2020 has undoubtedly been a tumultuous year for all, including financial institutions, and in some instances, the circumstances presented by the global pandemic have opened the door to new, innovative means of economic crime – bolstered by uncertainty and increased vulnerability among consumers and financial employees.

As such, the new inquiry will explore:

• The current AML systems and sanctions that are in place
• The FinCen Files
• The work of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS)
• The rise of economic crime in relation to coronavirus
• Evidence relating to corporate liability for economic crime

Commenting on the Economic Crime inquiry, Treasury Committee Chair, Mel Stride, said:

“The previous Committee made a series of recommendations on the UK’s effort to combat money laundering and what can be done to prevent consumers from being victims of economic crime. The current Committee will now examine what progress supervisors, law enforcement and the Government has made in these areas. It’s important that the relevant bodies are held to account and scrutinized effectively to ensure that the UK is a clean place to do business and that consumers are protected from economic crime.”

CUBE comment

Anti-money laundering, and the systems and sanctions surrounding it, have been a key priority for financial regulators and financial industries over the past years. The coronavirus pandemic has undoubtedly sharpened this focus, leading many to ask whether the current framework is one that is working now, and if it will work into the future as economic crime evolves.

The FinCen Files gave previously unseen insights into AML and the effectiveness of financial institutions in combatting it. The leaked documents provided a worrying expose of the times that AML processes have not been implemented stringently enough to prevent economic crime – leading many to question whether the current system is working.

While the new inquiry follows its predecessor by only 19 months, the constantly evolving nature of financial services means that it is in no way premature. CUBE welcomes the inquiry and eagerly awaits the outcome, and the effect that it may have on rules, regulations and policies for our customers.