Bridging Finance

Exactly who are you doing business with?

AML specialist warns businesses to stay alert to a crime that accounts for almost £2 tn globally

The UK has the dubious honour of being the second-biggest money laundering country in the world, where an estimated £88 bn worth is cleaned by criminals every year.

No firms are immune, as the NatWest bank found to its cost last year, when it pleaded guilty at Westminster Magistrates’ Court after admitting it failed to comply with anti-money laundering regulations.

The omission saw almost £400 mn laundered by one firm. Not that it should have been that hard to spot, given that the offending firm on one occasion deposited £700,000 in cash in black bin bags at one NatWest branch.

The bank was subsequently fined £265 mn, although the sum would have been much bigger had NatWest not pleaded guilty, the judge on the case added.

It may be a hard fact to swallow for the finance industry, but, as Transparency International says, “banks play a key role in facilitating money laundering and feature prominently in almost every major money laundering scandal. ”

A leading UK provider of anti-money laundering software, Smartsearch, has developed a fully compliant AML verification service that can reputedly deliver business checks in less than three minutes.

Speaking to Mortgage Introducer, the firm’s newly appointed COO, Collette Allen, cautioned businesses against being lax in their anti-money laundering practices, as criminals are becoming increasingly sophisticated.

“The legacy forms of verifying identity, such as collecting a passport or driving licence, served a purpose at the time, but as

things always do, the environment has evolved, the technology has evolved, and it means that we need to stay at the forefront to be able to combat money laundering,” said Allen, who was the company’s youngest board member at age 30. Collette Allen Companies such as Smartsearch provide alternatives to document verification and offer a “much more robust” system, verifying document information from Experian, Equifax and Dow Jones, which is hard to forge, Allen said. However well intentioned, firms face additional challenges because money laundering regulations can be highly complex and companies sometimes fail to understand their level of exposure to these types of crimes. UK governments have repeatedly come under proverbial fire for a perceived relaxed attitude toward oligarch money, especially when related to property acquisitions. And it’s no small concern. According to Transparency International figures, there’s roughly £6.7 bn worth of questionable funds in property alone. Allen noted, “The responsibility is ultimately a collective one. We are a target.... [A]ny large city is exposed to money laundering, so London is obviously at the height of that. “The UK has some of the most stringent regulations, and a lot of the time we lead the way with anti-money laundering [measures, but] the government needs to do more around taxpayers and British territories overseas, making sure that we’re removing as many privacy laws that mean that people can hide behind corporate structures, and they are working to do that, but these things take time.” 

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