SFO: Tell-tale signs of money laundering

Serious and organised crime costs the United Kingdom an estimated £24 billion a year, according to a new government report setting out the threats posed by money laundering. Along with the report, the government relaunched its “Flag it Up” campaign to raise awareness and show how the legal and accountancy sectors can stamp out money laundering.

Headed by the National Crime Agency, “Flag it Up” is a joint campaign between the government and the legal and accountancy sectors that aims to raise awareness of the tell-tale signs of money laundering.

Both new and existing clients can present money laundering risk, said Scott Devine, policy advisor at the Anti-Money Laundering Law Society. Don’t make the mistake of assuming money laundering risk lies only in the onboarding of clients, he said.

Tell-tale signs of money laundering may include, for example, circumstances in which:

A long-term client starts making requests that are out of character;

A client repeatedly asking for services outside your or your firm’s area of expertise; and

A client that requests arrangements that do not make commercial sense.

“The main issue that we see is the obscuring of beneficial ownership of assets,” said Elizabeth Baker, head of the SFO’s Proceeds of Crime Division. Not knowing who owns the assets lies at the heart of money laundering, and corruption and fraud, as well, in many cases.

Suspicious Activity Reports (SARs) are the missing piece of the intelligence puzzle. SARs are critical in tackling money laundering, serious and organised crime, corruption and fraud and provide valuable information from the private sector that would otherwise be invisible to law enforcement, Baker said.

Failing to act on suspicious activity could result in a company being subject to a criminal and/or regulatory investigation, Baker added. That’s not to mention the reputational damage and far-reaching commercial impacts that could result if suspected criminal activity is confirmed and the business is no longer able to bid for certain types of contracts.

In June 2017, the U.K. government implemented the Fourth Money Laundering Directive, which strengthened the U.K.’s AML legislation. “However, only if those in the legal and accounting sectors continue submitting the crucial SARs we need to close intelligence gaps,” the SFO stated, “can we shut down the criminal networks that support serious and organised crime for good.”