Money launderers are now so sophisticated, it has never been more important to have electronic AML systems in place

Money Laundering is officially defined as ‘the act of concealing the transformation of profits from illegal activities and corruption into ostensibly "legitimate" assets. So-named because the process of money laundering ‘cleans’ dirty money.

 

Not only is money laundering a crime in itself, but it is an enabler of wider, much more serious criminal activity, with the National Risk Assessment (NRA) stating that there is ‘a marked overlap’ between money laundering and terrorist financing.

It is estimated that serious and organised crime, from drugs and cybercrime right through to people trafficking, costs the UK economy around £24billion a year.  And it is highly likely that most of the proceeds are laundered through UK banks and other UK businesses, and this includes dirty money from international criminal activity.

In fact, the National Crime Agency’s National Strategic Assessment 2017 found that scale of the problem in the UK is much worse than previously thought. In a recent report, the NCA said that previous figures of £36bn to £90bn for all money laundering impacting on the UK is a ‘significant underestimation’.

As with all types of criminal activity, money launderers are becoming more and more sophisticated and employ a wide range of techniques to clean their dirty cash. Professionals, such as accountants, solicitors, estate agents, lenders and IFAs are all at risk of being used by money launderers to inadvertently help them to legitimise the proceeds of their crimes.

Due to the heightened awareness of the money laundering problem in the UK, the Home Office and the NCA launched its #Flagitup campaign (https://flagitup.campaign.gov.uk/).

Through the campaign, both agencies will be working with those sectors at risk of money laundering to raise awareness of the warning signs and help them to protect themselves and their firms from becoming victims.

And the FCA has announced that it will be taking a harder stance on companies and individuals that are not properly adhering to AML controls. The FCA has made it clear that as well as exercising it’s supervisory and civil enforcement powers in relation to those it regulates, it may also use its criminal powers to prosecute companies and individuals.

The FCA is a designated prosecutor in certain prescribed money laundering regulations and is also able to prosecute substantive money laundering offences as a private prosecutor. So what this means is, the FCA may now consider criminal prosecution if a company or individual it regulates has particularly serious AML failings. Or, if they are repeatedly failing to put the correct AML controls in place.

So with AML in the spotlight more than it has ever been before, it has never been more important for firms to ensure they have appropriate AML systems in place.

Unfortunately, it is easier said than done, because even when firms do have AML controls in place, keeping on top of the fraudsters is becoming increasingly difficult.

Money launderers have operations all over the world, wrapped up in so many different layers of activity that many have become almost impossible to detect.

Fraudulent documents, such as passports and driving licences used to launder money and make fraudulent transactions are now so sophisticated, that even when banks, lenders, IFAs and other companies have AML processes are in place, the manual checks involved means they are often struggling to spot the fakes.

As a result, there are billions of pounds worth of transactions going through the UK financial system every year, funded with dirty money. In fact, a recent report from Transparency International estimated that as much as £4.4billion of UK property may have been bought with ‘suspicious wealth’.

So what’s the answer? Electronic AML checks.

Electronic identification is now widely recognised as the most reliable, secure and efficient source of information for identity solutions. Eventually, electronic identification will rid the need for manual checks that are open to errors.

In order to have a failsafe system that will guarantee to recognise fraudulent documents and AML activity, thousands of banks, lenders, legal firms, IFAs, accountants, estate agencies and insurance companies are turning to electronic AML platforms to complete their AML checks, Global Sanctions and PEP screening.

With a one-stop shop AML verification system you can use one platform for multiple solutions, whether it is UK or international.

By using an AML platform, customers are able to search any AML search from one place. They can validate documents and make electronic identification verification through the system. Not only is this quicker and easier than manual checks, but it is also much more reliable, as it can match documents with information from major data suppliers like Experian, Equifax, Dow Jones and Companies House.

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