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Advisers raise concerns over govt's economic crime plan

Advisers raise concerns over govt's economic crime plan

Advisers have raised concerns over the fact bankers from some of the biggest banks are involved in the government’s plan to tackle economic crime.

The government published its Economic Crime Plan today (July 12), which has been created and will be enforced by the Economic Crime Strategic Board, chaired by home secretary Sajid Javid and chancellor Philip Hammond.

It is the government's plan for tackling economic crime in the UK bringing together the public and private sector.

Agencies such as the Serious Fraud Office and the Law Society alongside trade bodies like UK Finance also sit on the board — but so do bankers from HSBC, Santander, RBS, Standard Chartered Bank and Nationwide.

According to some advisers, this could cause a "conflict of interest" or a potential shortfall in the plan, considering how closely linked banks can be to economic crime, perhaps most glaringly illustrated by HSBC's money laundering failures.

HSBC was hit with close to £1.2bn in fines by US regulators for failing to comply with anti-money laundering and international sanction laws back in 2012.

Alan Lakey, director of Highclere Financial, said: "Banks and bankers do need to be involved in such movements but they shouldn’t be making any decisions.

"It’s the typical thing we see when government gets involved in these kind of financial services matters. They love nothing more than forming groups and committees, then putting the type of people that have in the past been involved in such crimes on said committees.

"When this happens, you get a fair bit of ‘fudging’."

Paul Stocks, financial services director at Dobson and Hodge, agreed, adding that many people had the perception that bankers were at fault for the financial crisis and not appropriate for this kind of position.

He added: "I would be concerned there could also be a slight conflict of interest here.

"The bigger the company, the more they have to lose if any changes are put into place."

Mr Stocks said something as serious as an economic crime plan needed to have "complete impartiality" and he was concerned that would be impossible when "the direction of travel could be detrimental" to a business.

Campaigners have also pointed out there is no corporate liability reform mentioned in the new plan.

The banks have agreed to pay £6.5m over the next year to improve the regime for reporting suspicious activity and back the mission of the economic crime plan.

In the plan, the government stated it would do "all in its power" to combat economic crime to ensure the UK does not become a "safe-haven for illicit finance".

The government will "step-change" its response by extending public sector and private sector partnerships, such as the Joint Money Laundering Intelligence Taskforce.

The taskforce has so far supported more than 600 law enforcement investigations, made 150 arrests and seized more than £34m in illicit funds and the government plans to extend this type of taskforce to other areas of economic crime.