London: “The Money Laundering Capital of the World”

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Friday, August 5, 2016
Monty Raphael QC
The UK has developed a huge body of law designed to prevent and punish money laundering. In the 30 years since its first anti-money laundering (AML) statute, the Drug Trafficking Offences Act 1986, the UK has embraced successive EU directives and Financial Action Task Force (FATF) recommendations designed to outlaw the laundering of the proceeds of all serious crime - corruption and tax evasion included. From the beginning, the financial sector was tasked with introducing Know Your Customer (KYC) measures and reporting suspicious activities. This gatekeeping role has been extended to the whole of civil society, most particularly to the sectors governed by AML regulations, including lawyers, accountants, estate agents, dealers in high value goods and casinos. UK law provides for long prison sentences, confiscation and fines, the latter on corporations as well as individuals. The UK’s financial regulator, the Financial Conduct Authority (FCA), has the power to sanction businesses policed by it. In parallel, there is a civil forfeiture regime under the Proceeds of Crime Act 2002. Individuals, including lawyers, have been sent to jail, and companies, including some of the largest banks, have faced fines for breaches of the law or for having inadequate safeguards.