This week UK universities were in the spotlight as reports suggest they are unknowingly facilitating money laundering by accepting cash payments from high-risk countries.
The recent UN Commission report blames international financial system failures, which they say includes tax abuses, corruption, and money laundering, for plunging billions into poverty.
Lastly, United Arab Emirates (UAE) has taken major steps to combat money laundering through establishing an executive office to oversee regulations.
Read more below.
Money laundering fears as U.K. universities accept £52m in cash
Universities in the UK have been accused of unknowingly facilitating money laundering after a Times investigation found that they accepted millions in cash from students from “high-risk” countries. They let students use banknotes to pay £52 million in fees over the past five years, which included receiving millions from China, India, Russia, and Nigeria.
In a 2019 report, the National Crime Agency said overseas students were a target for money launderers, and in the same year authorities froze 95 UK bank accounts containing about £3.6 million. Most of the accounts were held by students.
Matthew Page, a fellow of Chatham House who researched money-laundering risks at UK universities, said “universities that accept cash are at substantial risk of laundering the proceeds of crime, corruption and other illicit activities. Universities that fail to conduct basic due diligence cannot plausibly deny that they are involved in money laundering.”
All the accused universities said they had strong due-diligence procedures in place to avoid the possibility of money laundering through cash takings.
Find out more on this story in the Times.
Tax abuse and money laundering is trapping billions in poverty, says UN
A recent UN commission report said that billions of people around the world are being trapped in poverty by systemic tax abuses, corruption, and money laundering. A panel at the UN said criminals were laundering assets worth as much as 2.7% of global GDP (Gross Domestic Product) each year.
They went on to say that this is an alarming testament to the way the international financial system works in favour of the wealthy and that even during a pandemic, billionaires managed to increase their wealth by 27.5% whilst the rest of the world was plunged into turmoil.
Ibrahim Mayaki, the co-chair of the panel and former prime minister of Niger, said: “Closing loopholes that allow money laundering, corruption and tax abuse; and stopping bankers, accountants and lawyers from enabling crime are steps in transforming the global economy for the universal good.”
The report goes on to call for an international minimum corporate tax rate, more progress towards taxing digital companies and measures to improve the transparency of company ownership and public spending.
Some countries have started changing their regulations to meet the recommended measures, but globally we still have a long way to go.
UAE Executive Office to combat money laundering, terrorism funding
The UAE has taken a major step in combating money laundering and terrorism financing as cabinet has approved the establishment of the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT).
This new Executive Office will help implement the countries National AML/CFT strategy and National Action Plan (NAP), which is designed to strengthen the UAE’s anti-financial crime system.
Hamid Al Zaabi the Director-General of the Executive Office of the UAE said “The scale and complexity of financial crime has increased. So too has the UAE’s awareness and understanding of it. That is why the UAE is committed to taking action.”
Looking to improve your compliance processes?
Get in touch to see how our intelligent compliance solution can help your organisation or request a demo to see it in action.
