By Nick Maxwell, Research Manager, Transparency International UK
It certainly is.
The money laundering risks for the UK arising from grand corruption on a global scale are considerable. In 2011, the UN Office for Drugs and Crime estimated that only 1% of illicit money flows around the world are likely to be detected. While the UK is a good performer relative to other nations, the struggle to effectively tackle the scale of the crime is being felt globally.
The Government’s new Serious Crime Bill, which will have its Second Reading on Monday 16th June, is a very welcome step in the right direction to improve the situation. The Bill addresses at least three of the gaps that Transparency International UK identified in UK legislation which have limited the ability to tackle corrupt capital flows to date.
First, the Serious Crime Bill creates a new offence of participation in an organised crime group which has been targeted at stopping networks of family members, lawyers and accountants hiding stolen assets. Second, the Bill also honours a commitment in the Serious and Organised Crime Strategy to strengthen legislation by enabling assets to be frozen more quickly and earlier in investigations. Third and finally, the Bill should extend Proceeds of Crime Act’s (2002) powers of restraint beyond cash to other realisable cash or cash-like instruments or products, for example share accounts, pension accounts or even, “bitcoins”.
These are positive developments. However, the Bill does not enable the rapid freezing of assets to the same extent as Switzerland and Canada, both of which imposed sanctions following the Ukraine Crisis much more quickly than the UK. It also does not extend the period to refuse consent for a suspicious transaction, as for example, Guernsey has. The Bill does not create an illicit enrichment offence in the UK, such as exists in 44 other nations, which would put the onus on owners of assets flagged as suspicious to explain legitimate sources of wealth. Finally, it doesn’t stop those accused of grand corruption exhausting suspect assets on their own legal fees, like Australia has clamped down on.
While the Bill is a welcome step, it is clear that there is still much more to be done.
This blog post was authored by Nick Maxwell, Research Manager at Transparency International UK (TI-UK). For more information on TI-UK’s work to improve the UK’s resilience against the threat of money laundering from grand corruption, please read their detailed submission to HM Treasury and the Home Office.
The City of London Corporation has previously published research into corruption risks in the City, authored by Transparency International UK. The report is available to download from the City of London Economic Research webpage.