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Allegations of suspicious financial activity surge 10 percent in Britain

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Allegations of suspicious financial activity surge 10 percent in Britain

David N. Robinson

United Kingdom’s National Crime Agency (NCA) in 2018 received a record number of reports flagging potential money laundering, terrorist financing and other suspicious financial activities.

According to the Financial Times, the NCA said that it received 463,938 so-called suspicious activity reports, or SARs, in 2018, nearly 10 per cent more than the preceding year.

Concerns about money laundering pushed up the total, with the number of red flags increasing by 20 per cent, to 22,196. But these flags led to just 40 arrests across 28 different cases, according to the NCA statistics.

The agency’s annual report into the SARs regime comes as concern grows that the City of London is acting as a global laundromat, washing hundreds of billions of pounds in dirty money from around the world, according to official estimates.

Government rhetoric about stemming the tide of ill-gotten gains has increased since the nerve-agent attack on a former Russian spy in the British city of Salisbury last year, which the UK blames on Russia.

The UK controversially received a gold star from the Financial Action Task Force, the global anti-money laundering watchdog, last month, despite its dirty money problem, but the SARs regime was one black spot.

In its assessment, the FATF, which sets global standards, said that the UK system needed a “significant overhaul to improve the quality of financial intelligence available”, and pointed to what it said was the under-reporting of suspicious activity by lawyers and accountants.

The NCA has also voiced concern that lawyers and accountants are not filing enough SARs, despite some coming into contact with clients whose source of wealth could be questionable. The agency’s figures showed that lawyers filed around 12 per cent fewer reports over 2018, contributing just 2,660, or 0.57 per cent of the total.

Accountants were more diligent, and filed 5,140 reports, or 1.11 per cent of the total, in 2018, an increase of 13.2 per cent compared with the previous year. Banks still account for the vast majority of SARs, contributing 80 per cent to the total volume received by the NCA.

Schools are also beginning to file more SARs, climbing from eight to 35 over the past year. Donald Toon, the NCA’s head of economic crime, said last year that private schools, where the average fees for each child are £17,232, are reporting laggards, even though campaigners fear the world’s corrupt are sending their children to British independent schools.

FATF also said that the UK had failed to improve action around the NCA’s Financial Intelligence Unit, which oversees the SARs system, since the last FATF review a decade ago. It urged the UK to allocate more resources, people and better technology to the unit.

The NCA has pledged to create an additional 46 roles in the unit over the next three years, anticipating that “the volume and complexity of SARs will continue to rise”.

Tom Keatinge, the director of the centre for financial crime and security studies at the Royal United Services Institute, said 2019 would be “a make-or-break year” for the FIU.

“It was poorly assessed by the FATF; the long overdue and critically required SARs reform remains an unfulfilled government commitment; and the emphasis placed by the NCA on an intelligence-led response to economic crime via the new National Economic Crime Centre means that the FIU’s underperformance needs to be urgently reversed.”

The Home Office and the NCA are also in the middle of overhauling the SARs system. The NCA report said: “SARs reform includes, but is not limited to, IT replacement. This is a matter of urgency, as the current IT is old and reaching the end of its life.”

Inflow of black money into United Kingdom came under search light when the case of a Bangladeshi family, who had brought millions of dollars into Britain, came into the media’s exposure. According to information, a sacked official of Bangladesh Armed Forces Shahid Uddin Khan smuggled out millions of dollars from Bangladesh to various countries including United Kingdom. In 2009, he invested one million Pounds in the United Kingdom in exchange of obtaining immigrant status under visa Tier 1, vide VAF No. 511702. The investment was made in the name of Shahid’s wife Farzana Anjum.

United Kingdom never enquired about the legality of the money Shahid and his family had invested, although it is learnt from various sources in Bangladesh that the family had never taken any permission from the Bangladesh Bank for repatriating such a huge amount of money.

In January 2019 it was learnt from various Bangladeshi newspaper reports that Shahid Uddin Khan and his family were actively involved into jihadist activities and were funding militancy groups such as Islamic State (ISIS).

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