Fortytwo Data: Campaign Against Money Launderers Leads To 20% Drop In Fines

• Treasury report shows sharp dip in enforcement last year after record numbers across all professions in 2015/16
• UK now accounts for 40% of all laundered money “red flags” in Europe
• But accountancy sector sees expulsions remain 77% above level two years ago, and 150% rise in number of fines on last year

The number of fines handed out for money laundering and terrorist financing rule breaches has fallen 20 per cent in the last year as tougher enforcement delivers a wake-up call, anti-money laundering and Big Data specialist Fortytwo Data reveals today.

It follows record enforcement in 2015/16 when 1,170 professionals - including lawyers, accountants and those in the gambling industry - were fined for failures. A further 45 were reprimanded and ten suspended[1].

By 2016/17 sanctions fell to 935 fines (a 20% drop), 31 reprimands (31% down) and eight suspensions (down 20%), according to figures released in a new report by HM Treasury.  

In the same period, the number of action plans handed down plummeted 57% from 1,371 to 593, reprimands dropped 31% to 31 and warning fells 4.7% to 325.

Meanwhile the accounting sector has saw 23 accountants expelled in 2016/17 (up 77% on 2014/15). The profession also witnessed a 150% rise in the number of fines in a single year, up from 14 to 35 in 2016/17.

The figures are contained in the Treasury’s sixth ‘Anti-Money Laundering and Terrorist Financing: Supervision Report 2015-17’.

It was compiled using data from the 25 UK Anti-Money Laundering and Combating the Financing of Terrorism supervisors, which includes the Financial Conduct Authority, HMRC and the Gambling Commission, as well as 22 legal and accountancy Professional Body Supervisors (PBSs).

At least £90bn in criminal proceeds is believed to be laundered in the UK annually, according to the National Crime Agency[2].

The Treasury report also reveals the UK accounted for more than 40% of all of Europe’s Suspicious Activity Reports (SARs) in the legal and accountancy sectors.

SARs are alerts submitted to the National Crime Agency that flag up suspicious activity indicative of money laundering.

Table 1: Enforcement action imposed by the 25 AML/CFT supervisors and 22 legal bodies

Table 2: Enforcement in the accountancy sector

Julian Dixon, CEO of specialist Anti-Money Laundering (AML) and Big Data firm Fortytwo Data, comments:

“Any professional tempted to help criminals launder their ill-gotten millions could not have escaped the huge amount of publicity levelled at professionals over the last few years.

“And this campaign appears to be working but the authorities have got to keep the pressure on because these professions are targeted precisely because of their perceived respectability.

“The spike in expulsions of accountants over the past two years shows why there is no room for complacency.”

Notes:

[1] Source - HM Treasury

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/685248/PU2146_AML_web.pdf

[2] Source - NCA http://www.nationalcrimeagency.gov.uk/publications/807-national-strategic-assessment-of-serious-and-organised-crime-2017/file

[3] Definition of sanction or penalty

• Expulsion: To remove membership, authorisation, fit and proper status, and/or registration.
• Suspension: To suspend membership, authorisation, fit and proper status and/or registration.
• Fine: To levy a financial penalty.
• Reprimand: Any type of formal written warning issued by a tribunal, committee or organisation.
• Undertaking or condition: Any formal requirement to implement remediation or restrict ability to carry on business or offer specific services.
• Action plan: Any communication seeking improvements which is considered as part of the general capacity development and monitoring programme, rather than part of a formal disciplinary programme.
• Warning: Any communication with a firm cautioning against specific conduct.