From what we know, the bill will broaden the Registrar of Companies’ powers, making sure it has the power to oversee company creation and the ability to check for more information submitted on the Company Register, be it at the time of registration or retrospectively.
At the moment, the process of registering a company has been criticised for the lack of checks, facilitating a lax environment for criminals to set up companies in the UK and move illicit funds.
Other considerations include the examination of limited partnerships and the loopholes that currently allow criminals to use this as a money laundering mechanism.
The bill is also expected to introduce a gateway that will allow businesses in the financial services sector to share information with one another to ultimately improve their detection and prevention of economic crime.
More details will be revealed over the coming months, yet there is the risk of the bill being sidetracked.
The resignation of Boris Johnson as prime minister and consequent leadership contest brings a degree of political uncertainty. And with rising inflation, a cost of living crisis and fears of an impending recession, there is the additional fear of economic security and financial crime slipping lower down the list of priorities, at least in the immediate term.
A complete cultural shift
We cannot deny the importance of having legislation in place to counter financial crime in the UK. Nevertheless, as with all pressing national issues, the challenge is ensuring that policies are effectively enforced, with those in breach held accountable.
The burden should not lie solely on state regulators, rather a collaborative solution is needed that brings together the public and private sectors. Unfortunately, both sectors have significant obstacles to overcome.
Banks are regularly making the headlines for the wrong reasons. This came to a head in the UK recently, with Credit Suisse placed on the Financial Conduct Authority’s watchlist as a result of the bank’s involvement in risky transactions that are not internally challenged.
If any strategy to fight financial crime is to be successful, making sure banks are monitoring and flagging high-risk transactions is essential.
This is a systemic challenge facing not just the UK, but the global financial system. A survey of risk and compliance professionals by BAE Systems revealed that at least half of all money laundering activities go undetected.
The same report also showed that financial services compliance professionals are struggling with reduced budgets to actively address money laundering activities, which are becoming more sophisticated.