Taking the criminal temperature

Every year, the UK’s National Crime Agency puts out a “National Strategic Assessment of Serious and Organised Crime”, which I use as a very handy criminal barometer to measure what professional criminals are spending their time on.  The 2015 edition came out on 23 June, and of course I opened it immediately and started scanning for the words “money laundering”.  And to all those people who, years ago, counselled me to expand my interests “because money laundering will go out of favour”, I think we can say a big yah boo sucks.  Turns out that the NCA is of the view that “money laundering is now a high-priority risk in its own right [and] high-end money laundering, in particular, is a major risk”.  It’s a Pyrrhic victory for my career, of course, as I’d much prefer to see money laundering eliminated and then retire to write novels, but as long as I’m (we’re) needed, I shall fly the AML flag.

The NCA assessment this time round has more nifty graphics than I’ve seen before.  One shows the major sources of the criminal money being laundered in the UK, which include cybercrime, the trade in firearms, drug trafficking (with the UK market in cocaine being the biggest in Europe – and no, it’s not like one of those picturesque flower markets you see in Continental towns on Sunday mornings), people trafficking (with 10,000 victims in the UK) and economic crime (such as tax evasion of various stripes).

Delving into the details, the assessment shies away from putting a definite figure on any estimate of the scale of money laundering in the UK, preferring to say “hundreds of billions of US dollars”.  Particular concern is expressed about “high-end money laundering”, which is “specialist, usually involves transactions of substantial value, and involves abuse of the financial sector and professional enablers”.  We’ve worried about professional enablers before, and the NCA is clear about who it means: “The laundering of criminal proceeds is reliant on access to the professional skills of, among others, lawyers, accountants, investment bankers and company formation agents… We believe the professions posing the greatest risk are within the financial and legal sectors, for example accountants and solicitors.”  Particularly tasty for the money launderer is the solicitor’s client account: “Criminally complicit solicitors can effectively act as private banks to individual clients.  Client accounts offer criminals relative anonymity, the ability to obscure the origins and beneficiaries of criminal proceeds, and the perceived protection of legal privilege.”  Being the pernickety wordsmith that I am, my eye is drawn to that word “perceived”…  Are changes afoot, or prosecutions planned?  At the very least, cards have been marked.

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8 Responses to Taking the criminal temperature

  1. Lynne Ball says:

    Thank you for posting just at that moment. I was sitting looking at my computer and trying to decide what to put in this quarter’s AML newsletter. NCA Assessment here we come!

    • Hello Lynne
      Welcome to the blog! I am delighted that the post came at just the right time – always glad to help spread the AML message.
      Please do keep reading and commenting.
      Best wishes from Susan

  2. Robert James Long says:

    It is a long tale but in a very small way I like to feel I am partially responsible for “nifty graphics” appearing in the NCA report. It is definitely a thing that you’ll see more of in Law enforcement documents; we have discovered data visualisation about a decade after the rest of the world. A cynical man might say that these graphics can obscure much better than traditional graphs, but I am all for anything that makes a document more appealing. No point putting information into people’s hands if it is so dull they do not bother reading it!
    The NCA seems to have a renewed focus over the last year, I am hoping it is the start of something and we’ll see some good results coming out of them. I will be interested to see how they handle the professional enablers angle, nothing makes the point like a good solid prosecution.

  3. I’m with you 100% on this, Robert – which is why I use games, jokes and funny photos in my training. You can be as po-faced and serious as you like but – as you say – we must do all we can to make the information as appealing as possible so that people will actually read/listen/watch. Your optimism about the NCA (and your contribution to the changes) is excellent news, as they (and SOCA before them) have been rather poor at communicating with industry, so any improvement will be very welcome.
    Best wishes from Susan

  4. DAWN TINDALL says:

    Hi Susan – As a solicitor myself, I was interested to read the comment that “Criminally complicit solicitors can effectively act as private banks to individual clients.” Whilst I think the key words here are “criminally complicit” as, due to the restraints imposed by professional rules, stringent audit of client accounts as well as banking requirements, usage for criminal purposes should be restricted to the knowingly criminal lawyer, However, client accounts are used by many types of businesses which do not have that professional oversight and censure and where the bank basically rely on the user complying with their often unclear terms and conditions. Personally, I consider there is an overuse of client accounts where the FSB believes it to be an added service they can offer to an impatient client. Also I think the banks should do more to police their usage.

    • Dear Dawn
      Welcome to the blog, and thank you for your comment. You raise a very interesting point – although of course FSBs should (from an AML perspective, at least) be operating to the same standards as solicitors when it comes to checking CDD before allowing money into their client account. Personally I am wary of all client accounts, and often wonder whether they have outlived their usefulness, now that financial transactions can be completed so much more instantaneously than in the past.
      Best wishes from Susan

  5. Roy McCarthy says:

    Picking up Dawn’s point I’m afraid that the audit of lawyers’ client accounts in this (Jersey) jurisdiction isn’t so stringent. The reporting accountants are only charged with certifying compliance with client money rules. Also this is way after the transactions have washed through.

    The banks rely on the perceived integrity of law practices and hopefully that faith is justified. However I can see why the NCA are concerned.

  6. An excellent point, Roy – thank you. The supervision of non-financial services and businesses (e.g. lawyers, accountants, estate agents) varies enormously, even in supposedly “level” environments like the EU. If you operate in a jurisdiction where such businesses are highly regulated, you might think that this is the case everywhere – and it really isn’t. There are many reputable jurisdictions where such businesses have no – or very limited – AML obligations. Always best to check before having any expectations of AML due diligence by such businesses, let alone placing any reliance on it.
    Best wishes from Susan

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