10 Dec 2018
A global anti-money laundering (AML) watchdog has found that the United Kingdom has a ‘robust understanding’ of laundering and terrorism financing threats, but warned it faces significant risks of dirty cash inflows from offshore jurisdictions and foreign criminals.
The Financial Action Task Force (FATF) said Britain’s ‘strong’ public-private partnerships are a ‘positive feature,’ referring to the UK Joint Money Laundering Intelligence Task Force (JMLIT) which facilitates information sharing between banks and the police on terror funding and money laundering investigations.
It also praised the UK for its policies surrounding beneficial ownership, or the real ownership of firms, saying it is ‘a leader in promoting corporate transparency’ and has a good understanding of financial crime risks posed by legal persons and arrangements. It raised, however, concerns around its register of trusts.
“The information in the trust register is verified for accuracy, but the register itself is not yet fully populated.
“For legal persons, basic and beneficial ownership information is freely and immediately available to the public and all competent authorities through a central public register. This information is not verified for accuracy which limits its reliability.”
Of concern, however, is Britain’s links to the offshore world, which has seen its Overseas Territories, such as the Cayman Islands and British Virgin Islands, feature prominently in the world’s top dirty money scandals.
“The UK faces significant ML risks from overseas, in particular from other financial centres (including some of its Overseas Territories and Crown Dependencies), due to its position as a major global financial centre and the world’s largest centre for cross-border banking,” said FATF, which also warned of the problems posed by foreign criminal gangs.
“The main money laundering (ML) risks include high-end ML, cash-based ML, and the laundering of proceeds from fraud and tax offences, drug offending and human trafficking, and organised crime,” it explained.
“The UK also faces particular and significant risks from laundering the proceeds of foreign predicate crimes, including transnational organised crime and overseas corruption.”
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