Background
The UK's economic Crime Plan 2023-2026 has been released and sets out the areas of focus of the UK Government Departments involved in overseeing the UK’s arrangements and initiatives to prevent illicit economic activities.
Summary :
Their intension is to enhance the response to new and emerging threats (bringing in-scope fraud and sanctions evasion too). There is also a recognition for the need for improved collective understanding of risk and prioritisation. They aim to define a single version of the truth for their understanding of the threat and embed a framework to drive resource towards priorities to maximise a collective impact against the threat. (Some of you may recognise this from a US perspective, having recently announced their National Priorities framework). This will build upon existing resources such as the National Risk Assessments.
Why do we need a new plan- what’s the state of economic crime today?
🚩 The scale of the threat is growing and becoming more complex as criminals exploit technology to communicate, commit crime and hide profits
🚩 Fraud accounted for 41% of all crime experienced by adults in England and Wales in the year ending September 2022, with one in 15 adults falling victim in the same year.
🚩 It is possible over £100bn pounds per year is laundered through UK Corporate Structures using High End Money Laundering Methods
🚩 Cash Based Money Laundering still represents a significant threat estimated to be over £12bn each year. The majority of criminal cash linked to Illicit drugs and excise fraud. There has been significant abuse of the everyday banking facility at the Post Office.
🚩 Illicit Cryptoasset transactions linked to the UK in 2021 likely equated to at least £1.24bn (~1% of total transaction value) with a realistic probability they were significantly higher. Criminals will likely shift to less regulated exchanges and services using those based in less/poorly regulated jurisdictions.
🚩 It’s not just about the threat it’s about the victims too, in 2021/22 SARs were used to identify 16,500 potentially vulnerable persons for safeguarding and £300m was denied to suspected crtiminals as a result of the DAML regime. Criminals are increasingly using online methods to recruit money mules, a growing concern.
Some key areas of focus (non-exhaustive) for Financial Institutions across 2023/24
❗ Implement a Prioritisation Framework for economic crime (Q3 24)
❗ Common Standards on ML indicators (Q1 24)
❗ Renew assessment of ML through the markets threat (Q4 24)
❗ New Fraud Strategy (forthcoming) and failure to prevent Fraud offence (Q3 23)
❗ New Sanctions Sectoral Threat and Vulnerability Assessment (Q4 24)
❗ New Anti-Corruption Strategy (forthcoming)
❗ Money Mules Action Plan (Q3 23)
❗ Trade Based Money Laundering Strategy (Q4 2023)
❗ Production of jurisdiction specific intelligence assessments (ongoing)
❗ Consultations expected regarding changes to aiming to improve the implementation of a risk-based approach and principles to strengthen the guidance regime (Q4 23)
❗ New AML/CTF regulation (Economic Crime Bill 2.0) and cyrpto asset regulations (Q4 23)
❗ Potential changes to streamline SARS and Fraud Reporting including operational and technical changes to improve effectiveness
What’s going on at the regulators and enforcement bodies?
❗ Regulators are being held to a new performance framework and are seeking to implement new technologies to assess risks and to assess the effectiveness of firms’ policies, controls and procedures.
❗ Law Enforcement SARs reform and information exchange is further supporting decision making by regulators regarding enforcement. Enforcement activities are growing in number (660 sanctions in 21/22 vs 422 in 20/21)
❗ Electronic Money Institutions and Payment Institutions feature prominently in law enforcement investigations and supervisory action
❗ Development of the FCA’s intelligence and data-led approach aims to drive improvements to regulated populations sanctions systems and controls
What and How can Acuminor Support?
Acuminor are a threat and risk intelligence business. This underpins the solutions we provide. We have two Platforms: Risk Assessment Professional and Threatview. Risk Assessment Professional which enables organisations to conduct a intelligence driven, threat-led business wide financial crime and compliance risk assessment, using our powerful and configurable risk engine. Threatview aims to enable greater operational use of threat intelligence, for example to design training, conduct new product financial crime assessments, support investigations and oversight teams. Both have a range of additional use cases.
If you are looking to augment and enhance your financial crime framework and agree with Acuminor, that the best place to start is to ensure you are effectively identifying, assessing and understanding your threat and risk environment, then please don’t hestitate to contact Acuminor via sales@acuminor.com or check out our website here.
