UK's anti-money laundering controls need overhaul to stop 'dirty money'

Transparency International has attacked the UK's anti-money laundering (AML) controls as “woefully inadequate”, with the lobbying group calling for an overhaul to stop corrupt money and funding for terrorism from coming into the country.

Sectors with the worst problems were the legal, accountancy and estate agency industries, the charity said, while banks routinely dismissed allegations without a full review.

In a new report titled “Don’t Look, Won’t Find” released on Monday, Transparency International said only a very small proportion of the billions of pounds of corrupt funds was currently being detected and investigated by authorities.

It noted the majority of sectors were very bad at identifying and reporting money laundering, with some carrying out no anti-money laundering (AML) checks.

This comes despite David Cameron having repeated his commitment to eradicating money-laundering in the wake of the Paris terrorist attacks.

But the charity's report said: “Major problems have been identified in the quality, as well as the quantity, of reports coming out of the legal, accountancy and estate agency sectors."

It said that a majority of industry supervisory bodies failed to meet the standard of enforcement transparency and that one supervisory body even admitted it carried out no targeted AML monitoring at all during 2013.

The report also claimed that a third of banks dismissed serious money laundering allegations without adequate review, and that in the accountancy sector, at least 14 different supervisors have some responsibility which leads to inconsistency and variations.

Transparency International UK senior advocacy manager Rachel Davies said it was "appalling" that while David Cameron had vowed to fight "dirty money", the system that was designed to stop this was so “shambolic”.

“Corrupt individuals are still finding the UK to be a safe haven for their ill-gotten gains and the vast majority of institutions that are meant to prevent that from happening are not up to the job,” she said.

“If the UK wants to permanently shut the door on dirty money, there must be a serious change in this flawed system.

“We are proposing that the patchwork of different supervisors be replaced by one single organisation, with enough resources to start the process of a consistent and effective approach to AML in the UK.”