Out-Law / Your Daily Need-To-Know
The UK government has established a new taskforce designed to tackle the ongoing threat of economic crime.
The Economic Crime Strategic Board (ECSB) will meet twice a year and includes chancellor of the exchequer Philip Hammond, home secretary Sajid Javid, the chief executives of Barclays, Lloyds and Santander banks, and representatives from UK Finance, the National Crime Agency (NCA), the Solicitors Regulation Authority, Accountants Affinity Group and the National Association of Estate Agents.
The board will prioritise, direct resources and scrutinise performance against the economic crime threat, as set out in the government's Serious and Organised Crime (SOC) Strategy launched in November last year.
Civil fraud expert Jennifer Craven of Pinsent Masons, the law firm behind Out-Law.com, said the taskforce would be helpful.
"The assembly of the new taskforce is a positive step in the right direction in the fight against fraudsters and financial crime. No doubt the taskforce will be able to draw from a wide range of expertise from its proposed board members both in the private and public sector arenas," Craven said.
"However, it is important that both sectors bear in mind that the use of civil remedies, not only criminal, in the tracing and recovery of stolen monies and assets is particularly important for victims of fraud," Craven said.
"Legal weapons such as freezing injunctions, disclosure orders and other interim relief is of paramount importance if victims are to recover their losses, as well as the need to move quickly to stifle criminal activity and the movement of assets, to maximise the prospects of the victims’ recovery. Such a collective and collaborative approach on all fronts is required if the fight against fraud is to truly succeed," Craven said.
Javid said the Home Office was to commit £3.5 million in 2019/20 to reform the suspicious activity reports regime (SARs). SARs are used by banks, accountants, lawyers and estate agents among others to flag up concerns about money laundering or terrorist financing to the NCA.
In 2017/18 the NCA received a record number of reports, with the total number increasing by around 10% to 463,938, including a 20% rise to 22,196 requests for a defence against money laundering.
The aim is for government, the private sector, law enforcement and regulators to work together to design a new reporting system which is "more efficient and effective", although no more details are currently available.
White collar crime expert David Hamilton of Pinsent Masons said the commitment to reform SARs was welcome, but "meaningful reform will be no small task".
"The SAR regime has been roundly criticised for years, with organisations including Transparency International highlighting a perceived lack of activity at the NCA when it comes to following up on suspicious activities," Hamilton said.
"In order to avoid the NCA becoming a PO box, it needs a clear strategy and proper resourcing. The ECSB might be able to assist with the former, but their recommendations will need practical implementation, and that will require a considerable financial commitment," Hamilton said.
Hamilton said it remained to be seen if the investment committed by the government as part of the SOC strategy, coupled with additional jobs created by the NCA, would address current issues with the SAR regime.
UK Finance chair Bob Wigley 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."
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