UK faces severe money laundering threats

Leading UK RegTech specialist SmartSearch has warned the UK could be left behind in the fight against money laundering and financial fraud, if it fails to coordinate with the new agency being formed by the EU.

It has emerged that the European Commission will launch the Anti-Money Laundering Authority (AMLA) as part of a raft of measures contained in its action plan, set to be revealed on July 20.

The AMLA is a dedicated agency working independently of member states’ national authorities, giving it much greater power to identify and act upon significant money laundering threats.

It will also have new powers to fine businesses in breach of regulations up to ten per cent of turnover, and it will be looking at risks from non-EU countries such as the UK.

John Dobson, CEO at SmartSearch which operates both in the UK and the EU, said: “The formation of a dedicated resource to tackle the growing problem of money laundering is a positive step by the EU.

“Since the outbreak of the global pandemic we’ve seen organised criminal gangs in the UK taking advantage by exploiting loopholes in AML processes and using increasingly more sophisticated forged ID documents to get their dirty money through the laundering process.”

As part of the UK Budget announcement in March chancellor Rishi Sunak announced the formation of a new HMRC taskforce to tackle tax evasion and fraud, which is set to employ 1,000 extra investigators.

Dobson says the task force needs to work alongside agencies in other countries and make use of the latest technology to identify the source of the most significant money laundering threats.

He adds: “Of course, this is a global issue so it’s vital that the UK coordinates its response with the EU and other nations, as organised crime gangs won’t be concerned about political borders.

“Obviously as we are no longer part of the EU, this new authority will have no jurisdiction in the UK, but in order to be able to fight the threat of money laundering here in the UK most effectively, it’s vital that we coordinate and cooperate with the AMLA, otherwise risk getting left behind.”