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Clifford Chance

Clifford Chance

Regulatory Investigations and Financial Crime Insights

Upcoming developments to be expected at the midpoint of the UK's Economic Crime Plan for 2019-2022

Almost two years on from the UK’s Economic Crime Plan for 2019-2022, the Government, in partnership with UK Finance, has reported on progress against the plan in the recently published Economic Crime Plan: Statement of Progress.

The Economic Crime Plan sets out the Government’s response to a range of economic crimes which impact the UK, including money laundering, bribery, fraud and market abuse. Notably, it sets out how the Government anticipates the response to these issues will involve both private and public sectors working together to fight economic crime affecting the UK. We summarised the Plan's heavy emphasis on requirements for the private sector in defending against economic crime in our earlier Insights post.

Clearly, Covid-19 and its impact on economic crime was not expected when the Plan was published in July 2019. The pandemic has brought increased financial crime threats and challenges, with criminal actors taking advantage of the disruption caused to maximise opportunities to commit various forms of economic crime. Nonetheless, the Statement of Progress points to some achievements by the public and private sectors in delivering against the seven strategic priority areas set out in the Plan (on which, RUSI is maintaining its own Economic Crime Plan Online Tracker). However, it is clear that there is a lot to do in executing the rest of the Economic Crime Plan through to the end of 2022, and the Statement of Progress sets out a number of areas of focus, some of which are set out below.

So what's coming up?

  • Continuing development of the National Economic Crime Centre (NECC) as a public private hub to disrupt and prevent economic crime through use of collective resources – through 2021 and 2022.
  • Establishment of public private 'cells' to look at priority threat areas including risk management of unregistered money service businesses (MSBs) and understanding of over the counter cryptoasset brokersagreed public private action by end October 2021.
  • Consultation on legislative proposals for an information sharing gateway to enable businesses to share information and intelligence between themselves to prevent and detect more crime – due by Autumn 2021.

Money laundering:

  • Consultation on changes to the money laundering regime – including:
    • Consultation on updates to the Money Laundering (etc.) Regulations 2017 (MLRs) to be issued, focusing on a number of time sensitive or mature proposals for updating the Regulations to ensure the UK remains responsive to international standard change (e.g. on crypto assets) – due by Summer 2021;
    • HMT issuance of a Call for Evidence to inform an upcoming Review of the MLRs and Oversight of Professional Body Anti-Money Laundering and Counter Terrorist Financing Supervision Regulations 2017 (OPBAS regulations), which will seek views on how the UK's regulatory and supervisory regime can most effectively tackle money laundering and terrorist financing, while reducing any unnecessary burdens in businesses – due by Summer 2021; and
    • Review of the MLRs and OPBAS regulations to assess the effectiveness and scope of the regulations – commencing 2021, due June 2022.
  • Progression of corporate transparency reforms, including consideration of consultation responses on reform of the company registrar’s powers to query information; the quality of financial information on the companies register; and the implementation of the ban on corporate directors – due by September 2021.
  • Consideration of further legislative changes to the Proceeds of Crime Act (POCA) to provide law enforcement with stronger powers – outline expected by December 2021.
  • Development of legislative and non-legislative proposals to improve the effectiveness of Defence Against Money Laundering (DAML) and suspicious activity reporting (SARs) – due by Autumn 2021 – including on:
    • Exemptions for ineffective DAML reporting;
    • Establishing a SARs Advisory Group to make recommendations for continuous improvement to the regime;
    • Rebalancing regulated sector AML resource towards higher value activities; and
    • Work carried out by the private sector to improve of infomraiton flows and sharing of intelligence with the NCA in a sector-focused manner.
  • Progression of SARs IT reform, with a new IT system for reporters, the UK FIU (financial intelligence unit, part of the NCA) and law enforcement – set for delivery from 2021 and into Spring 2022.

Fraud:

  • Development of a Fraud Action Plan by the Government, private sector and law enforcement – due after the Chancellor's 2021 Spending Review (expected Q4 2021).
  • Relaunch of the Joint Fraud Taskforce: with deliverables including development of sector charters with industry to design out fraud at source – October 2021.

Cyber crime:

  • Scoping of a pilot for a national cyber crime forceby March 2022.

Market abuse:

  • Completion of the ongoing review of the criminal market abuse regime – formal recommendations on amendments to be developed by end July 2021.