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What is happening?

In March 2023, HM Government published its second Economic Crime Plan, covering the period 2023 to 2026. The Plan is available at: Economic Crime Plan 2.

What are the key points of the plan?

The threat to the UK from economic crime continues to grow. Fraud accounted for an estimated 41% of all crime experienced by adults in England and Wales in the year ending September 2022, and the National Crime Agency assesses that it is a realistic possibility that over £100 billion is laundered every year through the UK or through UK corporate structures. 

Russia’s invasion of Ukraine highlighted the threat posed by kleptocracies. Global financial centres must continue to cooperate to stop laundering the wealth of nations stolen by criminal regimes and corruption, and the Plan sets out a strategy to meet these challenges.

The Plan is underpinned by an investment of £400 million from the financial year 2022/23 to the financial year 2024/25. This funding represents £200 million of government investment and £200 million from the Economic Crime (Anti-Money Laundering) Levy1, which provides sustainable, long-term funding to combat economic crime.

    1 see: https://www.fca.org.uk/news/news-stories/fca-collect-treasurys-economic-crime-levy-anti-money-laundering-july

The Plan acts as the overarching document which also includes the forthcoming Fraud Strategy and the new Anti-Corruption Strategy, as well as the commitments made through the recent review of the UK’s Anti Money Laundering/Counter-Terrorism Financing regulatory and supervisory regime. It commits the UK Government to reduce money laundering and recover more criminal assets, combat kleptocracy and drive down sanctions evasion, and cut fraud.

• Taking action through the Economic Crime and Corporate Transparency Bill to reform the role of Companies House and improve transparency in relation to UK companies and partnerships. The Bill will provide the Registrar of Companies with enhanced powers, enabling it to become a more active gatekeeper over company creation and the custodian of more reliable data concerning companies and partnerships.
• The Government is also clear that further reform of the AML/CFT supervisory regime is needed. The 2022 review laid out a shortlist of four options for reform, and the Government will consult further before selecting and implementing the chosen model. In the interim, it will continue to work with supervisors to ensure that shorter-term improvements to effectiveness are achieved while longer-term reform options are developed. This will be assisted by a greater focus on the effectiveness of the supervision regime, including through the creation of the new performance framework recommended by the 2022 review.
• The Government will set out plans to protect consumers and grow the economy by regulating cryptoasset activities for financial crime compliance.
• Delivery of the SARs Reform Programme is expected to significantly enhance the UK Financial Intelligence Unit’s analytical capabilities.
• A new Anti-Money Laundering and Asset Recovery (AMLAR) programme will be established to build capacity across the system to increase intelligence, and investigative capability, and deliver improved technology.
•  The National Economic Crime Centre (NECC) will lead the system response to High-End Money Laundering including kleptocracy, Cash-Based Money Laundering (CBML) and tech enablers of money laundering.
•   The NCA will create a Combatting Kleptocracy Cell (CKC).
•   The Government will publish a money mules action plan in 2023.
•   The forthcoming Fraud Strategy will set out how the Government will cut fraud. It has committed £100 million of new money over the next three years to tackle fraud.

‘‘The Economic Crime Plan 2 sets out the government's priorities in tackling financial crime over the next three years. At a high level, it's good to see such a practical approach and real focus on the right financial crime threats in the UK today.  It also outlines much needed investment after a long period of inadequate resourcing. 
 
The priorities include: 
 
•    Reducing money laundering and recovering criminal assets (which is a very difficult task for law enforcement at the moment); 
 
•    tackling kleptocracy and sanctions evasion (especially with the Ukraine War backdrop); and
 
•    prioritising cutting fraud (which will sit alongside the soon-to-be-announced Fraud Strategy).  
 
It's also good to see a new section on crypto and the creation of a crypto cell to pool resources between law enforcement and regulators. 
 
For regulated firms, I think the plan is a positive step. Building on some of the successes from the first Economic Crime Plan, we should see more public-private partnerships and resource sharing.’’  

Jessica Cath

How can we help you?

Thistle Initiatives has supported firms for over 10 years as a trusted financial crime compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

Are you looking for help with your financial crime compliance arrangements, or more general regulatory questions? Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.