Thursday, October 29, 2020

Loopholes in anti-money laundering law could be exploited by criminals, MPs and Lords say


A joint parliamentary Committee today raised concerns that criminals could exploit loopholes in a new bill aimed at clamping down on laundering money through UK property.

The joint Committee on the draft Registration of Overseas Entities Bill welcomed the legislation, but said in its current state it could be circumvented by criminals.

According to the report £180m of UK property was subject to criminal investigation as the suspected proceeds of corruption between 2014 and 2018.

In 2017 160 properties worth over £4bn were identified as being purchased by high-corruption risk individuals, and 86,000 properties in England and Wales have been identified as owned by companies incorporated in secrecy jurisdiction.

The bill aims to crack down on money laundering by establishing a register of beneficial interests so that owners of property can be identified.

- Advertisement -

However, the joint Committee of Lords and MPs said it had concerns about the draft bill which could jeopardise its effectiveness.

The Committee said it was vital that the government introduce the Fifth EU Anti-Money Laundering Directive which covers trusts as these are not included in the draft bill and could be used to circumvent the law.

It said that as the bill exempts entities such as foreign governments from publishing their information, the government must be as transparent as possible and publish an annual statement to parliament of the number of times these exemptions are used.

The Committee also called on the government to ensure that the register was kept up to date and that information on proposed transactions should be entered before they take place in order to capture money laundering at the point it occurs.

- Advertisement -

Other concerns raised included a lack of verification checks to prevent criminals providing incorrect information and difficulties of enforcement meaning it may be easier to use civil penalties rather than criminal to punish those who infringe the law.

Chairman of the joint Committee on the Draft Registration of Overseas Entities Bill, Lord Edward Faulks QC, said: “We welcome this much-needed legislation as one of the vital tools required to create a hostile environment for money launderers who want to use the UK property market to hide unlawful funds. The legislation is well drafted, but there are still some loopholes in the draft Bill which, if unaddressed, could jeopardise the effectiveness of this important piece of legislation.”

Tom Beak, a lawyer at Kingsley Napley said: “The Bill is undoubtedly a positive step towards lifting the corporate veil and increasing the transparency of ownership in the UK property market.

“Whilst the recommendations strengthen the Bill and provide greater insight into how it would work in practice, the Bill is unlikely to make it impossible to launder money, just much harder.


Nigerian court declines to issue international arrest warrant for fugitive ex-Petroleum Minister in corruption case

The Abuja Division of the Federal High Court, on Wednesday, refused an application by the Economic and Financial Crimes Commission, EFCC, for an arrest...

South Korea’s former Vice Justice Minister sentenced to jail for bribery and sexual favors

Former Vice Justice Minister Kim Hak-eui, the figure at the center of one of Korea’s biggest political sex scandals, was placed under pretrial detention...

Beam Suntory Inc. fined $19.6 million in foreign bribery case

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to...

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World


Latest News

This Week

Former Blue Bell Creameries CEO indicted for fraud linked to 2015 listeria outbreak

The former president and CEO of Blue Bell Creameries L.P., a Texas ice cream company, was indicted Tuesday on wire fraud charges in connection with a scheme...

Swiss court upholds money-laundering conviction of ex-Ukrainian lawmaker Martynenko

A Swiss court has upheld the conviction of former Ukrainian lawmaker Mykola Martynenko for laundering via Swiss banks millions of dollars worth of kickbacks...

Former Harris County deputy constable pleads guilty to transporting drug money and heroin

A former Harris County deputy constable and her husband pleaded guilty Wednesday to charges of conspiracy to possess with intent to distribute heroin, according...

Brother of ex-Pakistan PM Nawaz Sharif jailed for money laundering

Pakistan Muslim League-Nawaz (PML-N) chief and Opposition Leader in the National Assembly Shehbaz Sharif was sent to jail on Tuesday in a money laundering...

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks