RIFE IN THE UK: AML FAILURES PROLIFERATE
Money laundering is a crime the global economy has been dealing with for centuries. It still ranks as one of the most pressing issues faced by financial institutions (FIs) today.
Given its clandestine nature, the total amount laundered through the global financial system each year is difficult, if not impossible, to determine. The International Monetary Fund (IMF), however, estimates it to be in the trillions or, by another metric, between 2 and 5 percent of global gross domestic product.
“Money laundering-related crime is a significant challenge globally,” says Martin Cheek, managing director at SmartSearch. “This is due, primarily, to ever more sophisticated methods employed by criminals, financial interconnectedness and numerous instances of non-compliance which are found right across the regulated sectors, either as a result of inadequate anti-money laundering (AML) processes or oversight, or deliberate breaches.”
In its ‘2024 Money Laundering and Financial Crime Report’ analysis of 16,150 ‘AML events’ over the past decade – an ‘event’ being a recorded crime or issue related to money laundering, drug trafficking, financial fraud, AML compliance failures, violations of AML laws, regulatory breaches and reporting failures, among others – SmartSearch illustrates the extent to which money laundering-related crime has remained a prevalent issue.
According to the report, money laundering is the most common AML event overall in eight out of 20 countries: the UK, South Africa, Austria, Malaysia, The Netherlands, Taiwan, Malawi and Romania.
A UK perspective
In the UK, money laundering is undoubtedly rife and on a scale far higher than the global average. The National Crime Agency (NCA) estimates it costs the UK economy more than £100bn annually.
Jul-Sep 2024 Issue
Fraser Tennant