Effect of money laundering on UK economy

The National Crime Agency has just published the most comprehensive public-facing analysis to date of the serious and organised crime threats affecting the UK, including the threat to the UK economy from money laundering.  According to the report, serious and organised crime is costing the economy at least £24bn every year, which also damages communities, businesses and individuals.

In addition, some of the same financial transfer systems used by serious and organised criminals in the UK are also used by terrorist groups, both domestically and internationally, and the UK and its dependent territories are believe to have been the destination for billions of pounds of European criminal proceeds.  UK banks and their subsidiaries are particularly attractive to money launderers because of their high transaction volumes, estimated at trillions of pounds a day, our developed financial services industry and our political stability.

Techniques often involve offshore transfers and investment to disguise the money’s criminal origins and asset ownership, while money launderers are particularly attracted to cash rich businesses.  However, although these figures are sobering, forensic accountants can help to stem the tide, as they can analyse a firm’s accounts to identify misconduct and ensure that they are not being used for nefarious purposes and that customers are not using money gained by illicit means purely to launder it.

In addition, if a firm is accused of money laundering, the forensic accounting team will gather the evidence from financial records and rebut any inferences the investigating authority has made about the origins or destination of funds.  They will put this into a report format and, if necessary, will present their findings in a court of law.

Author: Roger Isaacs, 2 May 2014

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