Economic Crime Strategic Board 17 February 2021 agenda and minutes
Published 4 May 2021
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Agenda
Date: 17 February 2021
Time: 10am-11:30 am
Location: Virtual
- Welcome and introductions
- Economic Crime Plan stocktake and future priorities
- Fraud strategy
- Sustainable resourcing model
- Response to cash based money laundering
- AOB
Welcome and introductions
1. The Home Secretary welcomed attendees to the Board and thanked attendees for their contributions to tackling economic crime. The Home Secretary noted that there is a shared interest in working together as a public private partnership and emphasised the importance of being bold in the collective ambition to tackle economic crime.
2. Attendees affirmed their commitment to the Economic Crime Plan and the efforts to combat economic crime. The Board noted that tackling economic crime is crucial for economic growth as well as to the integrity of the UK’s reputation as one of the cleanest and safest places to conduct businesses.
Economic Crime Plan stocktake and future priorities
3. The Economic Secretary to Treasury presented an update on the progress made on delivering the Economic Crime Plan since July 2019. Since the publication of the plan in 2019, the UK has experienced a significant period of change and the need to tackle economic crime has only been strengthened. Good progress has been made against the plan, with 20 out of 52 actions now complete. Notable achievements include the transposition of the of the Fifth Anti-Money Laundering Directive; publication of the proposals for Companies House reform; improvements to the Suspicious Activity Reports (SARs) regime; and the establishment of the National Economic Crime Centre’s ‘Fusion Cell’. However, it was re-iterated to the Board there remains a lot more to do to fully deliver the Plan’s ambition, particularly on fraud.
4. The Board was asked to approve a joint set of public-private priorities for 2021 which build on the Plan’s commitments. Proposed priorities included:
a. Improve the effectiveness and efficiency of the whole system response to economic crime, increasing high value intelligence to law enforcement and reducing low value activity that costs business and delivers little benefit
b. Design and deliver a comprehensive Fraud Action Plan
c. Bolster public private operational action to tackle known vulnerabilities, including cash-based money laundering, abuse of Money Service Businesses, and abuse of Trust and Company Service Providers
d. Continue to deliver SARs reform, including the next stages of the rollout of the new IT infrastructure and the increase in UK Financial Intelligence Unit staffing
e. Finalise the Sustainable Resourcing Model to support economic crime reform
f. Develop legislative proposals to tackle fraud, money laundering, seize more criminal assets, and to strengthen corporate transparency (e.g. Companies House Reform)
g. Capitalise on the G7 Presidency to strengthen the overall international response to illicit finance and anti-corruption.
5. The Board agreed for a Statement of Progress to be published and with the proposed priorities. The Board requested for the Statement of Progress be amended to include a forward delivery plan for each priority.
6. Multiple attendees highlighted that other sectors – specifically, the tech sector – were a key part of the solution and should be brought into the public-private partnership response to economic crime. The importance of recognising the varying needs and contributions of the different sub-sectors within the Anti – Money Laundering (AML) regulated sector was also noted.
7. Separately, the importance of the international response to illicit finance was stressed, with industry attendees offering their support for the UK’s G7 Presidency work in this space. The current capacity challenges in the court system were also detailed, with the Board highlighting a need to be aspirational but realistic on solutions for the challenges ahead.
Action: HO and HMT, with NECC and UK Finance support to develop delivery plans for each of the seven priorities, with clear milestones, deliverables and outcomes. This will bring in public and private sector partners and include HMG consideration on which elements of the seven future priorities may need new legislation. This will be reflected in the forthcoming Statement of Progress.
Action: NECC, UK Finance, HMT and HO to convene work at a senior level to look at the system design.
Action: UK Finance, with HO, HMT, FCDO, and industry support to discuss how the private sector can support the UK’s G7 Presidency ambitions on illicit finance and the wider economic crime international agenda.
Fraud Strategy
8. Baroness Williams of Trafford presented a framework for a future Fraud Action Plan, noting this discussion came at a timely moment with the levels of fraud increasing – now nearly 40% of all crime in the UK is fraud. Furthermore, it was highlighted the nature of fraud was evolving with it increasing taking place in the online space.
9. The framework for a future Fraud Action Plan was shared with the Board which looks to: disrupt the market by using national security resources and capabilities such as the National Cyber Security Centre to undermine online fraud infrastructure; improve Action Fraud; increase enforcement by pushing more fraud cases through the criminal justice system; crack down on money mules; support and safeguard victims; and change public perceptions by ensuring that the public have the advice and tools they need to protect themselves.
10. The ECSB approved the framework for a Fraud Action Plan and committed to work together to better inform the fraud intelligence picture. It was acknowledged that that further work on fraud was needed beyond the existing commitments in the Economic Crime Plan.
11. The challenge of funding the fraud response was highlighted, with suspended funds identified as a potential avenue for future funding. The need to bring in all sectors who generate fraud risk was also emphasised.
12. The ECSB also heard an overview of the work that the City of London Police have undertaken in relation to fraud and for the victims of fraud through the Economic Crime Victim Care Unit. It was noted that the new Economic Crime Court will also play a key role in the response to fraud.
Action: HO, with support from the NECC and UK Finance to develop the detail of the Fraud Action Plan for launch post-SR21, agreeing timeframes and deliverables.
Action: HO, with DCMS support to explore how other sectors can be brought into fraud work including consideration of tackling fraud through legislation.
Sustainable Resourcing Model
13. The Board heard that the public and private sectors already invest substantially in tackling economic crime, however a sustainable, predictable solution is needed to deliver a step change in outcomes. A set of five investment packages to transform the response to economic crime – which collectively could enable a benefit to society of c.£2bn over the course of this Parliament – was presented to the Board. The packages included proposed investments to: strengthen the anti-money laundering regime (including funding for SARs reform, Fusion capability, information sharing and financial investigator uplift); boost fraud system reform; strengthen the National Crime Agency and the National Economic Crime Centre; improve the identification, seizure and recovery of criminal assets; and to support the reform of Companies House.
14. The Board also heard that the sustainable resourcing model would be made up of four components: Government funding; the Asset Recovery Incentivisation Scheme; Suspended Accounts; and Economic Crime Levy. The Board received a more detailed update on the economic crime levy, where it was noted the Government response to the Economic Crime Levy consultation is expected to be published in Spring
15. The Board agreed the proposed funding packages were the right ones to transform the response to economic crime, and welcomed the extra £83m allocated to combatting economic crime at the 2020 Spending Review.
16. The Board highlighted the need for alignment between those who create risk and those who contribute to funding. The Board acknowledged that whilst significant progress has been made, as the intended levy is on the AML regulated sector, there is a gap on funding for fraud. Transparency on the levy spend is an important issue and the Board agreed to ECSB scrutiny of investment allocations and outcomes.
Action: HO and HMT to consider further funding for the response to fraud.
Action: HO, with UK Finance support to further explore how money in suspended accounts can be unlocked to support funding for the fraud response and to support victims.
Response to Cash Based Money Laundering
17. Graeme Biggar (Director General, National Economic Crime Centre) presented this item, explaining that cash based money laundering was one part of the money laundering threat (high-end laundering was also a significant threat, but was not the focus of this item). He re-iterated to the Board that cash-based money laundering really does matter: it is the proceeds of largely the drug trade that drives the most violence in this country. GB ran through the findings of the recent intelligence assessment on Cash Based Money Laundering, noting this assessment allows for a base plan to tackle the issue which the Board was asked to endorse.
18. The Board endorsed the high level proposed public-private response plan on Cash Based Money Laundering. It was acknowledged that good work is underway in banks and post offices and there is a need to work collectively as a system. The balance between ensuring cash is not used for criminal purposes while ensuring that the vulnerable still have access to cash was highlighted.
Actions: NECC, with UK Finance and HO support to iterate the Public Private Response Plan, inserting deliverables and due dates.
Actions: UK Finance with support from, HMT, BEIS and FCA to take forward work with the banks and the Post Office to address the money laundering vulnerabilities across counters.
AOB
19. The Board noted the papers submitted by the Civil Society Organisations Steering Group.
20. The Board also discussed the importance of the reform of Companies House and the potential role of Digital ID in tackling economic crime. The Board agreed to work collaboratively with other sectors on fraud, particularly online fraud and to join up the approach to economic crime training for law enforcement.
21. In summary, the progress made against delivering the Economic Crime Plan was noted, with the Board acknowledging there is more to do to fully deliver the Plan. The Board agreed to a framework for a future Fraud Action Plan and endorsed a public-private response plan to tackle cash-based money laundering.
Action: UK Finance with DCMS support to explore the issue of e-ID and Digital ID and the links to economic crime reform.
Action: UK Finance, to propose a joint approach to economic crime training to the City of London Police and the NECC.
Action: HO, NECC and UK Finance through the Economic Crime Strategic Communications Group to revisit fraud terminology to secure the public’s understanding and support.
Action: MoJ and DCMS minister to be invited to the next Board meeting.
Attendee List
| Attendee | Organisation/title |
|---|---|
| The Rt Hon. Priti Patel MP | Home Secretary, Home Office |
| Baroness Williams | Minister of State |
| Lord Callanan | Minister for Climate Change and Corporate Responsibility, Department for Business, Energy and Industrial Strategy |
| The Rt Hon Suella Braverman QC MP | Attorney General |
| John Penrose MP | UK Anti-Corruption Champion |
| John Glen MP | Economic Secretary to the Treasury, HM Treasury |
| Rory Geoghegan | Special Adviser on Justice and Home Affairs, No.10 |
| Andrew Bailey | Governor, Bank of England |
| Charles Roxburgh | Second Permanent Secretary to HM Treasury |
| Ian Dyson | Commissioner, City of London Police |
| Nikhil Rathi | Chief Executive, Financial Conduct Authority |
| Graeme Biggar | Director General, National Economic Crime Centre |
| Max Hill QC | Director, Public Prosecutions, Crown Prosecution Service |
| Lisa Osofsky | Director, Serious Fraud Office |
| Duncan Tessier | Director, Economic Crime, Home Office |
| Giles Thomson | Director, Office of Financial Sanctions Implementation and Economic Crime, HM Treasury |
| Simon York | Director, Fraud Investigation Services, HM Revenue & Customs |
| Sarah Connolly | Director Security and Online Harms, Department for Digital, Culture and Media and Sport |
| Bob Wigley | Chair, UK Finance |
| David Postings | Chief Executive, UK Finance |
| Joe Garner | Chief Executive, Nationwide Building Society |
| Paul Tennant OBE | Chief Executive, Law Society |
| Paul Phillip | Chief Executive, Solicitor’s Regulation Authority |
| Mark Hayward | Chief Executive, National Association of Estate Agents |
| Ian Stuart | Chief Executive, HSBC UK |
| David Lindberg | Chief Executive, Retail Banking, NatWest |
| Clare Woodman | Head of EMEA and Chief Executive of Morgan Stanley & Co. International Plc |
| Vim Maru | Group Director, Retail, Lloyds Banking Group |
| Duncan Wiggetts | Executive Director, Professional Standards, Institute of Chartered Accounts in England and Wales |
| Tracey McDermott CBE | Group Head, Corporate Affairs, Brand & Marketing, Conduct, Financial Crime and Compliance, Standard Chartered |
| John Collins | Chief Legal and Regulatory Officer, Santander |
| Huw Evans | Director General, Association of British Insurers |
| Laura Padovani | Group Chief Compliance Officer, Barclays |