Policy paper

Economic Crime and Corporate Transparency Act: economic crime in the UK

Updated 1 March 2024

What is economic crime?

Economic crime refers to a broad category of activity involving money, finance or assets, the purpose of which is to unlawfully obtain a profit or advantage for the perpetrator or cause loss to others. This poses a threat to the UK’s national security, economy and its institutions and causes serious harm to society and individuals. It includes criminal activity which:

• allows criminals to benefit from the proceeds of their crimes or fund further criminality
• damages our financial system and harms the interests of legitimate business
• undermines the integrity of the UK’s position as an international financial centre
• poses a risk to the UK’s prosperity, national security and reputation

Economic crime is a key priority within the Integrated Review, where the government has set out its commitment to tackle economic crime and illicit finance, which fund organised crime groups, terrorists and other malicious actors that undermine good governance and faith in our economy, and tarnish our global reputation.

The UK’s Economic Crime Response Framework

The UK’s response to economic crime is a collaborative effort. Policy ownership lies with central government, led by the Home Office and HM Treasury, with some specific policy areas also held by other government departments. The Scottish Government is responsible for criminal justice policy in Scotland. In Northern Ireland, criminal justice policy is overseen by the Department of Justice.

The National Crime Agency (NCA) is the national agency that leads the response to serious and organised crime, including economic crime. As serious and organised crime is devolved in Scotland and Northern Ireland, the NCA works closely with Police Scotland and the Police Service of Northern Ireland. The NCA’s Combatting Kleptocracy Cell, established in July 2022, plays a key role in its response to economic crime. The unit focuses on investigations into corrupt elites and Politically Exposed Persons (PEPs) laundering their assets within the UK.

The NCA’s National Economic Crime Centre (NECC) is a multi-agency centre that was established to deliver a step-change in the response to tackling serious and organised economic crime. The NECC brings together law enforcement agencies under a shared objective of reducing economic crime, including other parts of the NCA, Serious Fraud Office (SFO), HM Revenue and Customs (HMRC), Financial Conduct Authority (FCA), Crown Prosecution Service (CPS), the City of London Police (the national police lead for fraud in England and Wales), and police forces across England and Wales.

The UK has three statutory supervisors of anti-money laundering and counter-terrorist financing (AML/CTF): the Financial Conduct Authority, HMRC, and the Gambling Commission. In addition, the Office for Professional Body for AML Supervision (OPBAS) is an oversight body for the legal and accountancy professional body supervisors. The Office of Financial Sanctions Implementation (OFSI) helps to ensure that financial sanctions are properly understood, implemented and enforced in the United Kingdom.

The private sector organisations involved in our response to economic crime are even more diverse, in terms of numbers, capabilities and roles. While all private sector organisations may be vulnerable to economic crime, key stakeholders include those businesses with obligations under the Money Laundering Regulations 2017, such as those within the banking, finance, money service, accountancy, legal and real estate sectors (‘regulated firms’), and sectors engaged in the delivery of certain elements to tackle fraud, such as telecommunications.

International standards are also a key component to the UK’s response to economic crime. These standards are set by the Financial Action Task Force (FATF), an intergovernmental organisation founded to develop policies to combat money laundering and terrorist financing.

The current legislative framework

The main UK legislation covering economic crime are:

1. Proceeds of Crime Act 2002 (POCA): covers money laundering and sets out the primary offences related to money laundering, which are prosecutable without a need to prove the predicate criminality.
2. Terrorism Act 2000: sets out the primary offences relating to terrorist financing as POCA does for money laundering.
3. Anti-Terrorism, Crime and Security Act 2001: includes powers to freeze and seize terrorist cash and other terrorist assets.
4. Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations (MLRs) 2017: sets out the high-level requirements on regulated firms to combat money laundering and terrorist financing and ensure that key professionals identify their customers and understand the purpose behind transactions, including the source of funds where necessary.
5. Serious Crime Act 2015: builds on the current criminal and civil law to ensure the National Crime Agency, the police and other law enforcement agencies can continue effectively and relentlessly to pursue, disrupt and bring to justice serious and organised criminals.
6. Criminal Finances Act 2017: gives law enforcement agencies and partners, further capabilities and powers to recover the proceeds of crime, tackle money laundering, tax evasion and corruption, and combat the financing of terrorism.
7. Sanctions and Anti-Money Laundering Act 2018: enables the UK to implement international sanctions regimes or establish its own and to keep anti-money laundering and counter-terrorist financing measures up to date, helping to protect the security and prosperity of the UK and to continue to align the UK with international standards.
8. Economic Crime (Transparency and Enforcement) Act 2022: contains key measures to help crack down on dirty money, including from Russia, and other foreign elites abusing our open economy and introduces reforms to improve transparency and provide greater powers and more information to identify and investigate the illicit wealth of criminals.

The Economic Crime and Corporate Transparency Bill

Building on the recently enacted Economic Crime (Transparency and Enforcement) Act, the Economic Crime and Corporate Transparency (ECCT) Bill bears down further on kleptocrats, criminals and terrorists who abuse our open economy, strengthening the UK’s reputation as a place where legitimate business can thrive while driving dirty money out of the UK.

The Bill includes reform of Companies House, reforms to prevent abuse of limited partnerships, additional powers to seize cryptoassets more quickly and easily, reforms to support more effective and targeted information sharing to tackle money laundering and economic crime, new intelligence gathering powers for law enforcement and removing regulatory burdens on businesses.

The Bill is a key part of the wider government approach to ensure that law enforcement and the private sector have the tools needed to help tackle economic crime, including fraud and money-laundering, and will deliver greater protections for members of the public and businesses.