Law enforcement agencies will be given new powers to seize the proceeds of crime and demand criminals explain the origins of their wealth under new legislation that has just been issued by the Conservative Government.
The Criminal Finances Bill will also strengthen the partnership between the public and private sectors, boosting the fight against illegal activity. Among the measures being introduced are unexplained wealth orders, which will force those suspected of serious crime to explain where their wealth has come from or otherwise risk having it seized.
These orders will improve the recovery of illicit funds and prevent the UK from being used as a safe haven for the proceeds of international corruption.
Criminals will no longer be able to keep their ill-gotten gains out of the reach of law enforcement by hiding them in assets which officers currently cannot seize. Now, officers will be able to seize a range of items including precious metals and stones and even works of art.
Officers will also be able to take swift and effective action to forfeit criminal or terrorist funds held in bank accounts.
Security Minister Ben Wallace said: “The UK is one of the best places in the world to do business, but it will only stay that way if we take steps to protect the integrity of our financial system and the security of our citizens. We will not stand by and watch criminals use the UK to launder their ‘dirty money’ or fund terrorism. This legislation ensures that the UK is taking a world-leading role in cracking down on corruption and sends a clear message to the criminals – we will take your liberty and your money.”
Anthony Browne, CEO of the British Bankers’ Association, added: “Reforms are needed to protect individual victims and the economy. The Criminal Finances Bill provides an opportunity for the public and private sectors to stay ahead of the criminals.”
Procedures to prevent cheating
Stephen Morse, tax partner at PwC, commented: “Companies will have to ensure that they’re not helping people to evade tax by having reasonable procedures in place designed to prevent cheating. The fact that the Government is issuing guidance on these measures recognises the challenges companies will face. How do they develop safeguards to stop people intent on concealing assets and cheating tax? It will be important for companies to carefully consider the level of risk they face and ensure that procedures are appropriate and properly implemented. If not, the criminal acts of individual employees could result in criminal liability and significant financial penalties for companies.”
Tom Keatinge, director of RUSI’s Centre for Financial Crime and Security Studies, said: “This Bill is a crucial next step on the Government’s journey to upgrade the UK’s financial crime-fighting architecture and provide a response that matches the scale of the threat, but we cannot rely on legislation alone. Momentum in implementing the AML Action Plan must be maintained, addressing the under-resourcing and effectiveness of the UK Government’s capability. This Bill should be roundly welcomed and addresses some key weaknesses in the current regime. However, several material outstanding deficiencies must be addressed prior to the Financial Action Task Force evaluating the UK next year, in particular the staffing of, and investment in, the UK Government agencies directly responsible for tackling financial crime and the continued inefficiencies of the Suspicious Activity Reporting regime.”
Keatinge concluded: “As the Home Affairs Committee emphasised in July, the Government’s financial investigation skills shortage needs to be addressed. The under-investment in technology is deeply concerning. We cannot rely solely on new legislation, however effective and welcome this may be.”