Next September the Financial Action Task Force (FATF) will start a two-year assessment of the UK’s anti-money-laundering and counter-terrorist financing activities. This is the intergovernmental body set up in 1989 to develop standards and promote effective measures for combating economic crimes that threaten the integrity of the international financial systemNo doubt the Treasury will be hoping for a clean bill of health. I suspect that will prove rather challenging. London has a growing reputation as a global money-laundering centre. Although there are no confirmed figures for the scale of the laundering, estimates from the International Monetary Fund put the global figure at somewhere between 2% and 5%.
According to the National Crime Agency’s (NCA) 2016 annual national strategic assessment of serious and organised crime, if those figures were applied to the UK economy with its GDP of around £1.8trn, the amount laundered here would be between £36bn and £90bn a year.
As the NCA points out: “The risk of large volumes of criminal money being laundered through, and invested in, the UK, and the consequential criminal and regulatory penalties by UK, EU and US authorities, could lead to the withdrawal from the UK or potential collapse of major financial institutions. This would likely cause enduring reputational damage to the UK.”
Equally worrying is the fact that UK criminals use intermediaries or “professional enablers” such as solicitors and accountants to help launder illicit funds, hiding behind their “respectability”.
The reality is, I’m afraid, that even among our membership there will be individuals who are crooked. Others may get caught up unwittingly either because they are naïve or because they are trying to be helpful – which is no defence. The bad apples will be a tiny minority but could do untold damage to our reputation and the trust the public has in our integrity and professionalism.
The Consultancy Committee of Accountancy Bodies, which comprises five of the main UK accountancy institutes, has been working on a manifesto for government and guidance for the accountancy profession on fighting economic crime. The document, which was recently published, also contains a series of case studies illustrating traps for the unwary and how to recognise them. These cover a whole range of economic crime, including bribery and corruption, money laundering, fraud, tax evasion, cybercrime and intellectual property theft.
We believe that the accountancy profession has a vital role to play as the gatekeepers of the legitimate economy and I would urge you to read our manifesto and take note. And let us play our part in helping the Treasury to achieve its clean bill of health.
Michael Izza, ICAEW chief executive