Intelligence gaps have left UK banks at a very high risk of being used to launder the dirty money of crime, corruption and terrorism, a report claims.
The National Risk Assessment report produced by the Treasury and the Home Office reveals many of the structures that make carrying out financial activity in the UK appealing for law-abiding businesses also leave British banks vulnerable to corruption.
“The same factors that make the UK an attractive place for legitimate financial activity – its political stability, advanced professional services sector and widely understood language and legal system – also make it an attractive place through which to launder the proceeds of crime,” the report said.
The report also highlighted serious “intelligence gaps” which made it very difficult to tell how much corrupt money was actually flowing through the UK, particularly in terms of what was termed “high-end” corruption.
Also raised in the investigation are the activities of “known professional enablers” within the UK legal sector who facilitate money laundering “through the purchase of property with criminal proceeds, and the creation of complex corporate structures and offshore vehicles to conceal the ownership and facilitate the movement of criminal assets.”
While precise figures for corrupt money laundered through the UK are unclear, the report did look at some of the estimates given.
“Some non-governmental organizations estimate that between £23 billion and £57 billion [US$35.5 billion and $88 billion] is laundered within and through the UK each year,” the report states.
“The National Crime Agency assesses that hundreds of billions of dollars are laundered through UK banks and their subsidiaries each year.”
Nick Maxwell, the head of advocacy and research at Transparency International, said the report “puts beyond any doubt that vast sums of money from the proceeds of corruption around the world are flowing into the UK, and our system for stopping it and preventing it isn’t fit for purpose.”
“All countries are generally doing very badly at stopping the proceeds of corruption from being laundered, so it’s very positive that there’s such transparency over the law enforcement intelligence gaps,” he added.