How the UK government is tackling financial crime after Brexit

Written by Kunal Sawnhey, Kalkine Media

In October 2021, the world was taken by storm with the leak of the Pandora Papers. There was hardly any country that escaped from the expose of 11.9 million files. The world’s richest and most influential people’s involvement in the secret deals and their amassed wealth once again raised the call to put a curb to the shadow financial world and its transactions.

Financial or economic crimes in the UK, which not only include financial fraud and money laundering but financial corruption as well, is now a multi-billion-pound problem. The government though had accepted it, stating that the menace is burgeoning and could hurt individuals and communities along with harming the reputation of the nation.

How has the government been tackling the issue?

In July 2019, the government had come up with its Economic Crime Plan covering the years 2019-2022. The plan, which contains 52 actions, encompasses the public and private sectors’ entire work under its ambit.

As per the reports of the Royal United Services Institute, nearly 40 per cent of the actions in the plan had already been completed by October 2021. It further added that 32 per cent of actions were in progress, while 23 per cent of actions were overdue, and the remaining 3 per cent had no due date.

There has been a big achievement for the government as the formation of Fraud Investigation Service (FIS), a specialist HM Revenue and Customs (HMRC) fraud squad 5 years ago, has led to a recovery of over £1 billion from the proceeds of the crime and tax offenders in so many years. HMRC has been proactively using its powers to seize and recover inexplicable assets. From 2020 to 2021, it had ordered the freezing of 151 accounts and secured 157 criminal convictions.

Has Brexit raised the risk of corruption?

Ahead of the Brexit, there was an apprehension of the rise in corruption, the Treasury Committee in its report on Economic Crime in 2019 had raised the issue and urged the government to remain vigilant while negotiating any trade deal. It had also asked the government to continue the existing information-sharing arrangement between the two blocks.

The UK has been aggressively pursuing action against financial crimes, and after the Brexit, both UK and EU agreed to support international efforts to combat money laundering and terrorist financing. However, the separation has not been that smooth from the financial aspect as well, and many payment providers complained of IBAN discrimination.

The leak of FinCEN papers in 2020 and followed by the Pandora Papers in 2021 had forced the government to go for reforms that could strengthen the reliability of the information. But Financial crimes are becoming more sophisticated every day, and while Covid-19 has already had a significant impact on financial services globally, it also raised the requirement of a flexible risk assessment for financial institutions. Moreover, on the UK’s part, there is an urgent requirement to settle data-sharing agreements with the EU, which would benefit the safety and security of all member countries by continuing access to a common intelligence database.

About Lisa Baker, Editor 2357 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.