TI: UK AML supervision is an unworkable mish-mash
Tuesday, November 24, 2015 at 9:28AM
Richard L. Cassin in National Risk Assessment, Rachel Davies, Transparency International UK, United Kingdom, money laundering

Transparency International released a report Monday calling for a radical overhaul of the UK’s anti-money laundering system.

The report said the current system of anti-money laundering supervision in the UK is "woefully inadequate and structurally unsound" and is letting billions in corrupt funds flow into the country.

Last month the UK’s Treasury and Home Office published the first national risk assessment of money laundering and terrorist financing in the UK.

The NRA warned that money laundering presents a serious threat to the UK’s national security. It said the authorities are detecting only a small proportion of illegal money.

Transparency International said Monday the "responsibility for this open door to dirty money lies with the institutions charged with overseeing the AML rules in the UK."

TI called the current AML system a mish-mash. There are 22 supervisory bodies that oversee the key sectors -- financial services, law, accountancy, property, luxury goods, and trust and company service providers, TI said. Nearly all of the supervisory bodies are ineffective, according to the research.

"TI-UK is calling for the UK Government to strip the various private sector institutions and professional bodies of their AML supervisory roles and consider creating a single, well-resourced 'super' supervisor to protect the UK against money laundering," Monday's report said.

Rachel Davies of TI-UK said: Given that the Prime Minister has rightly said that dirty cash is not welcome in the UK, it is appalling that a shambolic system is failing to stop that flow.”

The TI report said the UK AML system isn't fit for the purpose. In the accounting sector alone, at least 14 different supervisors have some responsibility -- "leading to widespread inconsistency and variations."

TI also cited the real estate and auction sectors as having weak supervision.

A third of the banks in the UK dismissed serious money laundering allegations without adequate review during the past year, TI said.

TI’s report, Don’t Look, Won’t Find: Weaknesses in the supervision in the UK’s anti-money laundering rules, is  here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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