The Home Secretary and Chancellor have today jointly chaired a new Government taskforce which will work with senior figures from the UK financial sector to tackle economic crime.

The scale of this type of crime – which includes fraud, bribery, corruption and money laundering – is estimated to be at least £14.4 billion per year.

The new Economic Crime Strategic Board, which will meet twice a year, will set priorities, direct resources and scrutinise performance against the economic crime threat, which is set out in the Serious and Organised Crime (SOC) Strategy.

The board includes CEOs and Chief Executives from the banking institutions Barclays, Lloyds and Santander as well as senior representatives from UK Finance, NAEA Propertymark and the Solicitors Regulation Authority, Accountants Affinity Group.

Money laundering is a particularly significant risk for the estate agency sector, with agencies in property hotspots like London particularly affected. Fines are hefty for non-compliance and prison sentences are also an option for agents who flout the law, or don’t have the correct policies and procedures in place.

Mark Hayward, NAEA Propertymark’s Chief Executive said: “The Economic Crime Strategic Board is significant in that for the first time, all the relevant industries and government departments are coming together to tackle economic crime by agreeing strategic priorities and ensuring that resources are aligned to deliver them. Property is often seen as a gateway to money laundering and it is essential that estate agents are aware of their duty in carrying out the right checks and reporting any suspicious activity. As a Board we will be seeking to ensure a step change in how the UK tackles economic crime and the role that the private sector can play in doing so.”

Home Secretary Sajid Javid said: “We need to take action on all fronts to target the corrupt fraudsters who are lining their pockets with dirty money and living luxury lifestyles at the expense of law-abiding citizens.

“The Government is already investing millions in the fight against economic crime, but it is crucial we work closely with our financial sector partners to win this battle. These criminals threaten the UK’s reputation as a world-leading place to do business and we have a joint responsibility to stop them.”

The Chancellor of the Exchequer, Philip Hammond, said: “The UK is leading the world in the fight against illicit finance, preventing fraudsters from stealing billions from the public each year. We know more can be done which is why the Home Secretary and I are launching the first ever cross departmental board to prevent more people from becoming victims of economic crime.

“By bringing together specialists across the public and private sector, we can use the best of our expertise to maintain our status as a global financial centre.”

At the board meeting, the Home Secretary will confirm that the Home Office will commit £3.5 million in 2019/20 to support work to reform the suspicious activity reports (SARs) regime.

With the private sector, the Home Office is co-designing a new system which is more efficient and effective, and which will benefit business and the public sector.

SARs are the mechanism used by members of the banking, accountancy, legal and property sectors to flag up suspicions about potential money laundering, terrorist financing and other suspicious activity to the National Crime Agency (NCA).

The NCA received a record number of SARs last year. The number of reports rose by about 10 per cent to 463,938 during 2017-18, compared with the previous year. However, despite a 32 per cent increase in the number of SARs coming from estate agents in the last reporting year, this figure still only stands at 710 reports, making up just 0.15 per cent of all SARs submitted. Considering the risk to the sector, it’s perhaps surprising that this figure isn’t higher.

SARs reform is one of the commitments in the SOC Strategy, launched in November, which is backed by Government investment of at least £48 million in 2019 and 2020, to further ramp up law enforcement capabilities to specifically tackle illicit finance.

The Home Secretary will thank UK Finance for its commitment to SARs reform. The Government is discussing with the private sector the best way to ensure this has the funding it needs. Since late 2018 the financial sector has already committed over £1 million in funding for the project.

Bob Wigley, Chair of UK Finance, said:

“We want to ensure the UK is the safest and most transparent financial centre in the world. Banks already spend over £5 billion a year fighting economic crime, but the private sector can’t tackle it alone. That’s why the finance industry works closely with law enforcement and Government agencies to stop the threat and protect customers. The new Economic Crime Strategic Board will strengthen these vital partnerships.

“As part of this, it’s vital that we have the best anti-money laundering reporting system possible. The industry is committed to supporting the Government in reforming the existing regime and UK Finance is currently hosting a team of industry and Home Office experts to achieve just that.”

Other measures in the SOC Strategy include additional investment in the multi-agency National Economic Crime Centre (NECC) which is now operational and includes officers from the NCA, HM Revenue and Customs, City of London Police, Serious Fraud Office, Financial Conduct Authority Crown Prosecution Service and the Home Office.

Source: NAEA