A new chapter for financial crime

When you live in a country with a Prime Minister who is alleged to have said in April 2021 that he would rather see “bodies pile high in their thousands” than order a third lockdown, and who now confirms that “we will move away from legal restrictions and allow people to make their own informed decisions about how to manage the virus”, you quickly learn that one man’s risk-based approach is another man’s free-for-all.  And whether you are looking at a virus or at money laundering, the same balance is being examined: profit versus safety.

That may sound over-dramatic and not a little prim and preachy, but it’s true: for most people, the only thing that puts a brake on the amount of AML we do is how much it costs.  Most front-office staff are not opposed to AML in principle; rather, they resent the time it takes away from fee-earning endeavour.  And what gives MLROs and compliance departments the muscle they need to counter-balance the profit motive is evidence that there is bad money out there and that, with no AML, it will flood into our institutions and contaminate our societies.

God forbid, then, that these MLROs turn with any hope at all to the latest thoughts on the matter from HM Treasury.  Given that one of HMT’s priorities (albeit the last on a list of eight) is “improving regulation of the financial sector to protect customers and the economy”, you might expect them to address this idea of protection in their high-level documents.  On 1 July 2021 they published “A new chapter for financial services” – a 21-page document setting out HMG’s plans for achieving the Chancellor’s “vision for an open, green, and technologically advanced financial services sector… that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses, and powering growth across the UK”.  I’ve done a bit of searching:

  • The word “regulation” appears 17 times – twice we have “robust regulation”, twice we have “agile regulation” and once we have “appropriate regulation”
  • “Competitive” appears 16 times, and “leading”/”leader”/”leadership” 24 times
  • “Protect”/“protection” appears six times – twice talking about protecting access to cash
  • “Crime” does not appear at all – nor “laundering”, “fraud”, “corruption” or “abuse”

Of course I realise that this document is part Party Political Broadcast and part international advert, but its authors obviously feel that neither of those audiences is going to be impressed by any attempt to tackle financial crime or drive it from our borders.  And – sadly – I am quite sure they are right.

Please note that my indignation and I are on holiday next week – normal blogging service will resume on Wednesday 21 July.

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