Anti-money laundering (AML) rules are not fit for purpose, which has led the way for corrupt funds to be shifted to the UK according to a study released by Transparency International UK (TI-UK)
The anti-corruption group revealed that billions of corrupt funds are moved to the UK every year because of inadequacies in the current system, where 22 separate organisations are responsible for enforcing AML regulations,
Senior advocacy manager at TI-UK, Rachel Davies, told business daily CityAM that UK prime minister David Cameron has stated that “dirty cash” is not welcome in the country, but a shambolic system had not stopped the flow. “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 added.
Davies also put into perspective how many fines were dealt because of money laundering. “The average house price in central London is more than the total amount of fines dished out to those who laundered money through property last year.”
CityAM reported that in order to prevent this, the UK government is considering setting up one single supervisory body to replace the current system. “The government has been absolutely clear that in order to protect the integrity and stability of this world leading financial system, we need an effective AML and counter terrorist finance regime,” a UK Treasury spokesperson said.
The EU and US’ shift in accounting standards may bring balance sheet losses and increase credit risk, according to James Elder, director of risk services at Standard & Poor’s (S&P) Global.
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Treasurers are being expected to do more work with fewer resources than ever before, so it is little wonder that the automation of day-to-day operations was highly discussed on the second day of EuroFinance, the annual treasury event held in Barcelona this week.