This week, turning financial crime policy into practice was high on the political agenda, as Russia’s invasion of Ukraine prompted a Labour MP to pressure the UK Government over an economic crime bill which could expose London’s links to dodgy Russian money; the Scottish Government rebooted its serious organised crime strategy; and the European Union’s planned money laundering watchdog will tackle cryptocurrency-based financial crime.
Find out more on these stories below.
Labour leader urges UK Government to accelerate economic crime bill as Russia invades Ukraine
Labour MP and party leader Keir Starmer has responded to breaking news of the Russian invasion of Ukraine by urging Prime Minister Boris Johnson to introduce the economic crime bill, which has caused political ructions in the past, without further delay. The bill contains legislation designed to expose the true identities of dubious foreign individuals and entities suspected of financial crime who anonymously purchase UK properties, of which, according to a Transparency International estimate, Russian suspects own more than £1.5 billion worth.
During the parliamentary debate, Starmer emphasised that Russia had invaded a sovereign nation, not a breakaway state, and that peace in Europe was under threat. He reminded Prime Minister Boris Johnson that the Conservative Government had promised to “unleash a full package of sanctions” if the invasion occurred and urged him to introduce the bill in the current parliamentary session, which is set to end within weeks. PM Johnson defended his government’s actions, stating that rules already in place had imposed £37bn worth of sanctions against banks, 275 individuals had been sanctioned, and tougher rules were imminent.
Duncan Hames, Policy Director at Transparency International UK, also urged haste of the PM, noting that “by taking swift action on corporate secrecy now, the UK can be clear it intends those with dirty money should have nowhere to hide.”
Read more on this story at the BBC.
Scottish government’s strategy for fighting organized crime includes urging banks to train staff to spot money laundering and fraud
Scottish authorities announced their updated Serious Organised Crime Taskforce Strategy on 23 February 2022. The strategy aims to combat serious organised crime groups (SOCGs) active in Scotland, whose threat is “growing in scale and complexity”.
Scottish Justice Secretary Keith Brown outlined the new-look strategy, stating that it aimed to identify key threats and combat them by improving co-operation between role-players across all sectors. He broke the strategy down into its objectives, called the four ‘D’s’, which are to:
- Divert people from involving themselves with SOCG’s activities and/or products
- Deter SOCGs by supporting the public and private institutions which work with each other to protect themselves and their communities against organised crime
- Detect and bring to book criminals involved in SOCGs
- Disrupt the illegal activities of SOCGs
Brown further said that although drug trafficking is still Scotland’s biggest illegal market, authorities have observed SOCGs diversifying their activities into multiple criminal typologies. He also noted that online child sexual exploitation crime had increased, and added that the scourge of human trafficking is among the high-priority threats identified.
The new strategy includes guidance for all sectors on how to combat organized crime, advising financial services and banks to “train staff to recognise signs of money-laundering and fraudulent activity, report suspicious activity to law enforcement agencies, [and] support your customers in protecting themselves.”
Read more on this story at Police Professional.
EU mulls new anti-money laundering agency with cryptocurrency oversight
According to reports earlier this week, the European Commission (EC), the EU’s law enforcement entity, is planning a new financial crime law enforcement agency which will have a clear oversight role for cryptocurrency firms. The source claimed that a bloc of EU member states, including The Netherlands, Luxembourg, Italy, Austria, and Spain, are championing the proposed LEA’s regulatory function on cryptocurrencies, with a focus on cross-border money transfers.
The 2021 crypto crime report by Chainalysis noted that global cryptocurrency-based crime increased monetarily to a record $14b (£10.46b) from $7.8b (£5.83b) in 2020. The report stressed, however, that overall cryptocurrency transaction volume increased 567% over the same period, with illicit cryptocurrency transactions accounting for just 0.15% of that total in 2021.
In contrast, The EU’s Home Affairs Minister, Ylva Johanssen, interviewed on the issue at the Munich Security Conference in February 2022 and told a panel that the nimbleness, speed and anonymity of crypto-based crime make it a challenge for EU law enforcement and added that cryptocurrencies are “being used for many other crimes and that means it goes into different types of criminal modus operandi, as some of these groups are very professional.”
The new LEA could be up and running by 2026.
Read more on this story at City AM.
Find out how to improve your AML processes with award-winning technology.
Get in touch to see how our intelligent compliance solution can help your organisation or request a demo to see it in action.
Photo by Robert Anasch on Unsplash
