In March 2023, the UK launched its Economic Crime Plan 2, building on the first iteration of the plan with measures to “continue to to transform the UK’s response to economic crime”. On announcing the new plan, the government highlighted the damage that economic crime inflicts, with over £100 billion pounds laundered in the UK each year, and with fraud accounting for around 41% of all crime. The government also highlighted the Russian invasion of Ukraine as an example of the growing criminal threat posed by kleptocracies.
Acknowledging the evolving nature of the financial landscape, the updated UK Economic Crime Plan designates new resources and financial support for enforcement authorities, and for fraud, anti-money laundering (AML) and counter-financing of terrorism (CFT) efforts. As the new Economic Crime Plan comes into effect, it’s important that UK firms understand how it will change the AML/CFT landscape and how to ensure compliance under the new regime.
The First UK Economic Crime Plan
Launched in 2019, the first version of the plan was known as the UK Economic Crime Plan 2019 to 2022, and was implemented to protect the UK from the “significant threat” of serious financial crimes such as fraud, money laundering, and the financing of terrorism. The plan sought to bring together “the capabilities, expertise and intelligence of the public and private sectors” in order to defend the UK’s economy and “support legitimate growth and prosperity”.
To that end, the original Economic Crime Plan set out the following 7 strategic priorities for combatting economic crime in the UK:
- To better understand the threat of economic crime and the UK’s performance in combatting it.
- To find better ways to share and use information between public and private sector institutions for the purposes of addressing economic crime.
- To make the “powers, procedures and tools” of UK law enforcement authorities as effective as possible.
- To strengthen the collective capabilities of UK law enforcement, the justice system, and the private sector in detecting and disrupting financial crimes.
- To build resilience to financial crime by enhancing private sector management of risk and risk-based supervision.
- To improve ownership transparency of legal entities and arrangements.
- To develop an “ambitious international strategy” for addressing economic crime in order to enhance the UK’s global influence.
Key Outcomes of the First Plan
The UK government has characterised the implementation of the first Economic Crime Plan as a success, citing the following achievements:
- An improved understanding of criminal threats through joint public-private risk assessment initiatives.
- Reform of the UK’s Suspicious Activity Report (SAR) regime, and a comprehensive review of the UK’s money laundering regulations.
- New legislation including the Economic Crime (Transparency and Enforcement) Act, the Economic Crime and Corporate Transparency Bill, and the Online Safety Bill.
- Enhanced domestic and international cooperation.
UK Economic Crime Plan 2: Key Updates
The UK Economic Crime Plan 2 seeks to “build on the foundations” of its predecessor and to “focus more directly on impact and outcomes”. The plan allocates £200 million of government investment and £200 million from the Economic Crime (Anti-Money Laundering) Levy to achieve that goal, with a focus on 3 key outcomes:
Reducing money laundering and recovering more criminal assets
- Limiting abuse of UK corporate structures
- Increasing the effectiveness of the UK’s AML/CFT regulatory regime
- Combatting cryptoasset crimes
- Improving SAR intelligence, feedback, and analysis
Combatting kleptocracy and sanctions evasion
- Improving financial sanctions design, implementation and enforcement
- Strengthening the international and operational response to kleptocracy
- Pursuing criminals responsible for fraud and blocking fraud
- Helping the Public Sector Fraud Authority reduce the impact of fraud
New Initiatives Under the Updated Plan
In order to achieve the outcomes set out above, the new plan will put the following ideas and reforms into action:
- Financial crime investigations: The Economic Crime Plan 2 will see the recruitment of 475 financial crime investigators who will address money laundering and asset recovery.
- Public-private coordination: A new approach to public-private coordination will establish joint priorities in order to maximise resources, and detect and prevent financial crime.
- Fintech: Law enforcement agencies will implement state-of-the-art technology solutions, including advanced data analytics, to keep pace with criminal methodologies.
- Cryptoassets: The government will establish a new Crypto Cell which will pool the expertise and enforcement tools of law enforcement agencies and regulators in order to tackle the criminal abuse of cryptoassets.
- Supervisory reform: The new plan will introduce “ambitious reform” of the UK’s supervisory regime in order to encourage greater information and intelligence sharing.
- Kleptocracy: The government will expand the UK’s Combatting Kleptocracy Cell, harnessing the expertise of the National Crime Agency (NCA).
How Technology Can Help With Economic Crime Plan Compliance
The second Economic Crime Plan emphasises a greater degree of cooperation between public and private entities, and applies a greater AML/CFT scope so that firms can deal with evolving global risks such as international kleptocracy and cryptoasset crime. In this new regime, quality, actionable data will be critical: firms will need to be able to collect and analyse data on their customers, from sources around the world, distribute that data, and make effective compliance decisions as quickly as possible. Similarly, as the UK government implements aspects of the new plan, the regulatory landscape may shift, which means firms will need to be agile in their approach to regulatory compliance and be prepared to react when new threats emerge.
Ripjar’s Labyrinth Screening platform is designed for advanced data analysis in a challenging, fast-moving regulatory environment. Built with cutting-edge machine learning technology, Labyrinth Screening enables firms to search customers against thousands of global data sources, and generate actionable financial intelligence in seconds. Updated in real time with the latest financial crime data, Labyrinth searches cover global adverse media stories, sanctions lists and watchlists, and the platform allows firms to tailor searches for the most relevant risk data in order to minimise false positives and enable strong, speedy decision making.