The UK is one of the world’s largest and most open economies. The government is committed to tackling the risk of illicit financial flows from money laundering and terrorist financing, and to protecting the UK as an attractive country for legitimate business and a leading global financial centre. As the threats from illicit finance and terrorist financing continue to evolve, so must our understanding of the risks and our response.
Today, the government is publishing the UK’s second National Risk Assessment of money laundering and terrorist financing. This 2017 assessment, jointly published by the Treasury and the Home Office, shows how our understanding of and response to money laundering and terrorist financing have developed since the first assessment in 2015.
The key findings of the 2017 assessment are as follows:
High end money laundering and cash based money laundering remain the greatest areas of money laundering risk to the UK. New typologies continue to emerge, including money laundering through capital markets and increased exploitation of technology.
The distinctions between money laundering typologies are becoming increasingly blurred. Criminal funds are progressing from lower level laundering and are being accumulating into larger sums to be sent overseas using more sophisticated methods.
Professional services are a crucial gateway for criminals looking to disguise the origin of their funds.
Cash, alongside cash intensive sectors, remains the favoured method for terrorists to move funds through and out of the UK.
A wide-ranging set of reforms by government and law enforcement over recent years is still in its early days, but is starting to take effect.
The UK has been at the forefront of recent global efforts to shut down money laundering and terrorist financing. The 2016 London Anti-Corruption Summit led to over 600 specific commitments made by more than 40 countries and six major international organisations.
In 2015, the UK published its first ever national risk assessment of money laundering and terrorist financing. This set out candidly the areas where action was needed. In 2016, the government published an action plan and committed to the most significant reforms to our anti-money laundering and counter-terrorist financing regime in over a decade.
Many of the actions in this plan have now been delivered or are underway. The Criminal Finances Act 2017 will provide tough new powers such as Unexplained Wealth Orders. The Money Laundering Regulations 2017 bring the latest international regulatory standards into UK law. The publicly accessible register of people with significant control (PSC) was introduced in 2016, and records the beneficial owner of a company, thus improving corporate transparency. Progress continues with reforms to the suspicious activity reporting and supervisory regimes.
This 2017 assessment provides a critical component of continued partnership and prioritisation between government, law enforcement, supervisors and the private sector.
A copy of the report has been deposited in the Libraries of the House.
This statement has also been made in the House of Lords: