UK Government launches fraud and money laundering crackdown

The UK Government has announced plans for a new crackdown on money laundering and fraud in the UK. 

The new Economic Crime and Corporate Transparency Bill will focus on tightening rules around registering a company in the UK, with the hope of reducing fraud and money laundering via the use of shell companies.

The UK’s company registration process has been heavily criticised in recent years for the ease with which criminals are able to set up sham companies used as a front for organised crime and to launder illicit funds. 

According to the Government’s press release, if the Bill is passed, anyone who registers a company in the UK will now need to verify their identity.

Companies House will be given greater powers to check, challenge and decline incorrect or fraudulent information provided during the company registration process, and its investigation and enforcement powers will also be “upgraded,” enabling it to cross check data with public and private partners, as well as reporting suspicious activity to security agencies and law enforcement.

The Bill will also give law enforcement greater powers to demand businesses share information that could be related to money laundering or terrorist financing. “Red tape around confidentiality liability will be eased to enable businesses to share information to more proactively prevent and detect economic crime including fraud and sanctions evasion,” says the release. 

The Bill will also make it easier for law enforcement agencies such as the National Crime Agency to seize, freeze and recover crypto assets. 

Director General of the National Crime Agency, Graeme Biggar, said: “Domestic and international criminals have for years laundered the proceeds of their crime and corruption by abusing UK company structures, and are increasingly using cryptocurrencies. These reforms – long awaited and much welcomed – will help us crack down on both.”

Until more details are released, it is unclear what the impact will be for AML and compliance teams in the UK banking sector. David Postings, Chief Executive of banking trade body, UK Finance, said: “The banking and finance industry is committed to making the UK the safest and most transparent place in the world to do business. The Economic Crime and Corporate Transparency Bill will be critical in helping to tackle money laundering and we have been working with the government to ensure that these reforms are effective. We look forward to reviewing the detail of the Bill, including the changes to Companies House.”