link: Money launderers hiding transactions
When new money laundering regulations come into force in September as part of the Proceeds of Crime Act, accountants will be expected to file suspicious activity reports against any client they believe may be involved in criminal activity.
From September, failure to do so could lead to a prison sentence. The Home Office has identified that the country handles up to £18bn worth of dirty money each year, equivalent to 2% of the UK’s gross domestic product. But Transparency International claims this figure will be hugely supplemented by the laundering through London of proceeds of criminal activity occurring outside the UK.
‘The very features that have made London such a success could also encourage abuse of the system and a proliferation of money laundering,’ said Marcus Killick, chairman of the Gibraltar Financial Services Commission and author of a Transparency International report into money laundering in the UK.
‘It is inevitable that launderers will seek to use London, given the range of financial services on offer and the size of its markets,’ he said.
Accountants in the City could end up making many more reports than previously expected in order to avoid the risk of prison, especially as there is no lower limit to the amount of money involved according to Timon Malloy, editor of Fraud Intelligence.
‘There is going to be a lot more defensive reporting from accountants,’ said Malloy. ‘Anyone with the slightest hint of suspicion will have to make a report and the authorities could easily find themselves swamped if this happens.’
The number of suspicious activity reports filed with the National Criminal Intelligence Service was recorded at 56,000 last year, but this figure is expected to be easily outstripped this year with around 7,000 a month currently being filed and a huge jump in the number of reports expected from the autumn when the new legislation comes into force.