On 12 July 2019, the UK government published its "Economic Crime Plan, 2019 to 2022" (the "Paper"), a policy paper setting out seven strategic priorities, each with action plans ("Actions"), for combatting economic crime. Those priority areas are stated policy objectives developed by the Economic Crime Strategic Board, a new ministerial level public-private taskforce created by the Cabinet in January 2019 with a mandate to set priorities and direct resources pursuant to the UK Government's Serious and Organised Crime Strategy. The Paper provides a "collective articulation of the action being taken by the public and private sectors" in preventing and combatting economic crime. The existence of a policy paper at all setting out a plan against which the government's progress can be measured will be viewed by many as a positive development in terms of accountability. This Update highlights some key features of the strategic priorities of the Paper as well as their accompanying Actions, evaluates some of the criticisms which have already been made of the Paper, and asks whether any observations can be drawn regarding the general direction of travel of legislation and enforcement in these areas.
A central recurring theme of the Paper is the importance of proactive and constant engagement between the public and private sectors and the need to take a holistic approach to combating economic crime, given that often no single organisation or authority has clear line of sight over the information and intelligence required to prevent or detect economic crime. The Paper envisages that such an approach will include increased public–private collaboration, resource pooling, and information sharing.
One of the notable features of the Paper is that whilst it appears to set out an ambitious and coherent vision of work in the coming years, it is relatively light on detail. Importantly, conspicuous by its absence is an indication as to how pursuit of the strategic priorities and Actions will be funded. The Paper notes £48m of previously announced funding for the National Crime Agency ("NCA") alongside a contribution from banks of £6.5m in 2019/20 earmarked to improve the regime for Suspicious Activity Reports ("SARs"), but does not outline a detailed long term plan as to levels and sources of funding. It has been suggested by some commentators that the emphasis on increasing cooperation between the public and private sectors may well soon expressly encompass funding. The government press release accompanying the Paper suggests that further financial contributions from the financial sector are expected, although the amounts announced to date look insignificant against the estimated £100-150m total cost of the SARs Transformation Programme as outlined in the Paper.
The tenor of the Paper suggests that a degree of regulatory and law enforcement focus will remain on so-called "professional enablers" – professionals such as accountants, real estate professionals and lawyers who might complicitly, negligently, or unwittingly facilitate money laundering. The continued use of this term reflects the ongoing scrutiny (and, in some circles, distrust) of the role of professional, regulated firms in economic crime activity. Much has been written about the focus on such firms and whether or not labels such as "professional enablers" are accurate or helpful, and on 26 July 2019, the Solicitors Regulation Authority announced an increase of 43% in the number of SARs filed by law firms in 2018, compared with 2017. It is clear that the role of professional regulators will remain a priority for the NCA and for the Office for Professional Body Anti-Money Laundering Supervision, the regulator recently established to oversee the 22 separate anti-money laundering ("AML") regulators for professional bodies.
Patchwork of reports
The Paper is best understood in the context of numerous other reports published over the past few years in relation to economic crime. In particular, the Paper builds on the UK government's 2016 AML/CTF Action Plan, 2017 Anti-Corruption Strategy, and 2018 Serious and Organised Crime Strategy, and seems to be the overarching policy piece of a much broader picture of evaluation and reform of the UK's framework relating to economic crime matters. It follows (most recently) a House of Commons Treasury Committee's report on Economic Crime (March 2019), the government's response (May 2019), as well as the Law Commission's report on reform of the UK's AML framework (June 2019).
The Paper also follows the Financial Action Task Force's ("FATF") mutual evaluation of the effectiveness of the UK's AML and counter-financing of terrorism ("CFT") measures (December 2018), which was broadly positive in its assessment of the UK's AML/CTF regime, finding that the UK had one of the strongest overall AML/CTF framework of the 60 or so countries assessed to date. In particular, it praised the UK's understanding of risk, its response to terrorist financing, and its targeted sanctions regime.
However, FATF's mutual evaluation also found that there are parts of the framework requiring further development, notably: (1) the SARs and AML/CFT supervisory regime; (2) the role and resourcing of the UK Financial Intelligence Unit ("UKFIU"), which is the arm of the NCA responsible for reviewing and analysing SARs; and (3) reform of Companies House and registries of ultimate beneficial owners. Each of these areas is addressed in the Paper.
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