Transparency International UK (TI-UK) has welcomed a commitment from the UK Government to transpose into law the EU’s Fifth Money Laundering Directive (5MLD), but warns the current defences against dirty money need to be made more robust.
On 15 April 2019, the Government launched a consultation in which it committed to transposing 5MLD into UK law and stating how it intends to achieve this. However the consultation claims that the UK is already effective in preventing British companies being used in money laundering and corruption, which evidence suggests is not the case.
Costing as little as £12 and taking less than 20 minutes to set-up, there are insufficient checks in the UK company formation process to identify whether those using these services are involved in financial crime. This undermines confidence in the UK’s corporate registry. Transposing 5MLD should aim to fix this problem and address other weaknesses in the UK’s defence against dirty money.
Duncan Hames, Director of Policy at Transparency International UK, said: “With all the uncertainty surrounding Brexit we are very pleased that the Government has declared its intent to update legislation and not let the UK fall behind efforts taken across Europe to stop the flow of dirty money around and into Europe. Whilst we welcome the intent to deliver on these important reforms, we worry that the Governments puts too much faith in the effectiveness of the UK’s existing anti-money laundering defences.
“The Government knows it needs to strengthen to accuracy and completeness of the UK company register. It’s well-documented that there are not enough checks being done on who incorporates UK companies and the data they submit. It’s frankly absurd that hiring a car requires more proof of identification than incorporating a company. Both can do serious damage if they’re left in the wrong hands.”
“The UK Government needs to overhaul the system by which companies here are formed and make it more difficult for criminals to access UK corporate vehicles, if it is to genuinely claim to be showing leadership in the fight against money laundering and corruption.”
* Read the consultation documents on Transposition of the Fifth Money Laundering Directive here
* Transparency International UK https://www.transparency.org.uk/
[Ekk/6]
Diaspora*
Digg
Reddit
Newsvine
Technorati
StumbleUpon