On 9 September 2016, the National Crime Agency (NCA) published a National Strategic Assessment of Serious and Organised Crime 2016 (NSA). The NCA is a national law enforcement agency with a wide portfolio of responsibility with regard to different types of crime.
In publishing the NSA, the NCA aims to provide an indication of the risk posed to the UK and its interests by serious and organised crime. The NSA indicates the UK's national response to money laundering (ML) including the set priorities, the action already taken, the expected result and the means of measuring success. The NCA offers its observations regarding cybercrime, bribery, corruption and sanctions evasion, economic crime, modern slavery and ML.
More specifically, the NCA stated that ML facilitates and enables criminality. ML can potentially cause reputational damage to the UK's economy and threaten national prosperity, resulting in the withdrawal from the UK, or even to the potential collapse, of major financial institutions. ML is therefore, perceived as a national security issue and prioritised in the National Security Strategy. Although relevant numbers are not confirmed, according to the International Monetary Fund, ML globally represents between 2% and 5% of GDP. If these numbers were to be applied to the UK economy, the amount of money laundered would be between 36 billion and 90 billion (although FCA recently said the economic costs to the UK are assessed as being 24 billion).
The NSA defined high-end money laundering as laundering, wittingly or unwittingly, large amount of criminally acquired funds through the UK financial sector and related professional services. It is related to proceeds of major fraud and international corruption. ML may include illicit funds being passed electronically through the banking system and may include use of corporate structures, nominee directors and company formation agents, use of tax havens, virtual offices,
investment in high-value goods and property through a network of companies or professional enablers facilitating financial and legal activity. The NSA also defines trade-based money laundering as the movement of the value of criminal funds through the manipulation of aspects of licit or illicit trade transactions, such as third party settlement, over- or undervaluation of goods or falsification of documents.
With regard to cash-based ML, the NCA said that cash still plays a major part in the criminal money-laundering process. Criminal cash may appear as legitimate by means of an investment or movement through cash-based, cash-rich businesses, such as the gambling sector. According to the NSA, a high proportion of cash movements are managed by a few international controllers based in different jurisdictions, mainly in the Middle East and Asia, and supported by networks of collectors and consolidators. In the case of UK criminality, these networks operate in both the UK and mainland Europe. A great variety of professionals, such as accountancy service providers, legal professionals, estate agents and trust and company service providers are used in order to structure complex ML activities and give them an appearance of respectability and legitimacy. NCA underlines the importance of the private sector engagement to identify and disrupt high-end ML schemes, either by targeting individuals, disrupting techniques or target hardening the UK's financial system.
The NSA mentions that cash is likely to remain a major part of the money launderer's activities with most criminality involving moving, storing or using it at some stage. If new payment methods, virtual currencies and mobile payment apps are adopted by money launderers, the risk of ML is likely to increase. The NSA concludes that high-end money laundering is among the top five threats to the UK.