The National Crime Agency (the "NCA") has issued its 'National Strategic Assessment of Serious and Organised Crime 2014' (the "Assessment"). This is a 'must read' for Money Laundering Reporting Officers and their deputies, who need to:-

  • demonstrate an understanding of trends for the purposes of evidencing compliance with the Money Laundering and Terrorist Financing Code 2013;
  • incorporate any relevant findings into the business risk assessment; and
  • update any anti-money laundering training material accordingly.

In the prelude to the Assessment, the NCA Director General states that the UK government regards serious and organised crime as one of the greatest threats to the UK's national security and he estimates that it costs the overall economy at least £24 billion each year.

The Assessment recognises that the single biggest factor which has changed the landscape for serious and organised crime, is the growth in scale and speed of internet communication technologies. According to the Assessment, cyber techniques have proliferated and are used ever more extensively by wider serious and organised crime groups to commit traditional crimes, for example by enabling criminals to communicate with each other and to trade in the tools of their crime such as drugs, firearms and stolen data. The Assessment highlights that as more and more services become online, there is an increasing risk of online attacks and fraud. It is stated that 84% of all cases of identity fraud are delivered by the internet and that an increase is anticipated in the targeted compromise of networked systems, in ransomware attacks and in distributed denial of service (DDOS) attacks against business critical systems.

Whilst these are issues which must be taken into consideration in AML risk assessments at business and customer level, it is clear that the increase in cyber crime must also be incorporated into a firm's organisation wide risk assessment and must be prepared for in terms of business continuity and disaster recovery planning.

The NCA sees corruption as another key issue impacting across the board and the Assessment states that "most serious and organised criminals benefit from corruption that has taken place at some stage in the criminal process in other countries or in the UK". This highlights the close linkages between the money laundering risks that businesses have to consider vis-à-vis their customers and the bribery and corruption risk which must now be factored into client acceptance in order to comply with the requirements of the Isle of Man Bribery Act.

The Assessment contains a very useful map in relation to the types of crime that are prevalent in various countries around the world. This could usefully contribute to a business' country risk assessment for AML purposes. Other useful information in the Assessment includes:

  • virtual banks and virtual currencies are being used by criminals and this usage is likely to increase;
  • fraudulently obtained genuine passports are produced by a country's official passport issuer based on falsified information in the application and are particularly desirable to criminals; and
  • almost half of the active organised crime groups are involved in some way in the drugs trade.

Businesses which have to comply with the Isle of Man's anti-money laundering requirements and the financial services regulatory regime should be aware that business risk assessments and client risk assessments are not static documents and that the Regulators expect these risk assessments to be continually informed by relevant information from a wide range of sources. Whilst UK focused, the Assessment provides valuable and up to date information in relation to trends which should be reviewed and taken into consideration for risk assessment purposes. This will serve to demonstrate to the Regulators that the management team is risk aware and that regulatory expectations in this regard are being met.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.