The Criminal Finances Bill was introduced to the House of Commons on 13 October 2016. It will significantly improve the government’s ability to:
- tackle money laundering and corruption
- recover the proceeds of crime
- counter terrorist financing
In October 2015, the national risk assessment identified and assessed the money laundering and terrorist financing risks faced by the UK. It focused on 3 priorities:
- a more robust law enforcement response
- reforming the supervisory regime
- increasing the UK’s international reach
All 3 priorities are underpinned by a commitment to building a new and powerful partnership with the private sector. In April 2016, the government published an action plan on anti-money laundering and counter-terrorist finance setting out the steps we will take to address these threats.
The bill is a key element of one of the most significant changes to our anti-money laundering and terrorist finance regime in over a decade. It is part of a wider package of measures aimed at strengthening the government’s response to money laundering and improving the amount of criminal assets confiscated by the state (and, where possible, returned to victims). This includes:
- improving the effectiveness of the supervisory regimes for the regulated sector
- reforming the Suspicious Activity Report (SARs) regime, including investment in systems and processes to complement the legislation
- a cross-government action plan on asset recovery
- increasing our international reach through events like the Anti-Corruption Summit in May 2016 to build capacity with overseas partners, reflecting the global nature of this issue
The bill will change the law, introducing new powers and safeguards to enable this capability. Its provisions fall into 4 key categories:
Significantly improving our capability to recover the proceeds of crime, including international corruption
The bill will enable seizure and forfeiture of the proceeds crime that are stored in UK assets, extending current provisions to include value stored in bank accounts and high-value property, such as precious metals and jewels.
It will also create unexplained wealth orders requiring those suspected of corruption to explain the sources of their wealth, helping to facilitate the recovery of illicit wealth and stopping criminals using the UK as a safe haven for the proceeds of international corruption.
Transforming the relationship between public and private sectors
The bill will enable the sharing of information between regulated companies, helping to ensure that they provide the best possible intelligence for law enforcement agencies to investigate.
New powers will be created to assist investigations, including a power to extend the moratorium period in which Suspicious Activity Reports (SARs) can be investigated and giving the National Crime Agency new powers to request information from regulated companies. This will complement a fundamental (and primarily non-legislative) reform to the suspicious activity report regime.
Enhancing the UK law enforcement response
The bill will make it a criminal offence for corporations who fail to stop their staff facilitating tax evasion. This will hold corporations to account for their employees’ actions, ensuring robust global compliance regimes.
It will also permit disclosure orders for money laundering investigations, requiring someone suspected of possessing information relevant to an investigation to provide information. These already exist for corruption and fraud investigations.
Combating the financing of terrorism
The bill will make complementary changes to the law enforcement response to the threat of terrorist finance, helping to combat the raising of terrorist funds through vulnerabilities in the regulated sector. This will include mirroring many of the provisions in the bill so that they also apply for investigations into offences under the Terrorism Act 2000.
The measures in the bill were developed in close partnership with both law enforcement agencies and the regulated sectors, including major financial institutions – as well as consultation with key representatives from civil society – to ensure that they deliver the changes they need in a targeted, proportionate and justified way.