The government needs to do more to make the City of London a more hostile environment for economic crime, the solicitor general has said.
During a Treasury select committee hearing on economic crime today (30 October), Robert Buckland QC MP, the solicitor general, said while he believed the UK was already hostile towards economic crime, tighter legislation was needed.
"We have an international risk, a domestic risk, and we have high-end money laundering that is in effect criminally acquired funds from elsewhere in the world being channelled through our financial system," he said.
Ben Wallace MP, minister of state for security and economic crime, said one of the biggest weaknesses in the system was the number of places where suspicious activity can be hidden in the financial system, with individuals such as estate agents and accountants often being overlooked.
While there has been plenty of focus on the banks’ roles in money laundering, Mr Wallace said the authorities will soon start focusing on professionals such as estate agents and accountants.
"You will see them out and about, they will be people who put on a nice suit and pretend they are not engaged in the dirty money themselves, but they are as bad as the people who traffic drugs," he said.
Mr Wallace later said: "One of the important policy initiatives of this government is the reform of the SARs (suspicious activity reports) regime. Reports should be made by anyone, not just banks, who feel they are handling a suspicious transaction."
When asked if regulations will be loosened following Brexit in order to make the UK more competitive as an international financial centre, John Glen MP, economic secretary to the Treasury, said there were no plans to become "the next Singapore".
"From a regulatory point of view, there is absolutely no appetite to gain a competitive advantage by loosening our regulatory environment in the UK," he said.
Elsewhere, Mr Buckland said work continued on creating legislation that would introduce a new corporate criminal offence of failing to prevent economic crime.
He added progress had been made following the introduction of the concept of ‘failing to prevent’ in the Bribery Act 2010.
He said: "We want the criminal law to evolve for two reasons. First, we want to prosecute wrongdoers and corporates who are responsible for this. But second, we want to lead a cultural change because it’s my firm belief that corporates and companies respond well to a robust environment."
