By Dr Katie Benson
School of Social Sciences, University of Manchester
THE UK government on March 30 published its second Economic Crime Plan (ECP2).
The plan aims to reinforce the government’s priorities in relation to economic crime in or affecting the UK and sets out a series of actions for the coming three years intended to achieve its three key outcomes:
- reduce money laundering and recover more criminal assets;
- combat kleptocracy and drive down sanctions evasion; and
- cut fraud
The focus of the plan clearly reflects the evolving geopolitical landscape since the publication of its predecessor in 2019, as well as current priorities and policy developments in this area in the UK.
The invasion of Ukraine in early 2022 drew political attention to wider concerns about the threat posed by corruption and kleptocracy and the flow of ‘dirty’ money into the UK. Illicit finance was recognised as a national security threat in the 2021 Integrated Review of Security, Defence, Development and Foreign Policy.
The increasing role of financial technologies and cryptoassets in financial crime has created new challenges for policing and regulation. Tackling fraud has become a strategic priority for the government, and money laundering continues to connect all financial crimes. These themes can be seen throughout ECP2.
Targeting the ‘enablers’ of economic crime
One of the threads running through ECP2 is a focus on the ‘enablers’ or ‘professional enablers’ of economic crime.
“We are fully committed to pursuing criminals, kleptocrats, and enablers of economic crime” (Foreword to Economic Crime Plan 2).
The term ‘enabler’ is used in different ways in the plan. First, it refers to structural factors that enable economic crime, such as the way companies and other corporate structures can be abused or technological enablers of money laundering, such as cryptoassets and other fintech.
Second, it refers to individuals or organisations that provide professional services that enable criminality. Such individuals and organisations are referred to as both ‘enablers’ and ‘professional enablers’.
The term ‘professional enabler’ has been used in organised crime and financial crime policing and policy in the UK for over a decade. Initially, it referred to individuals in the financial, accountancy and legal professions who facilitated money laundering on behalf of organised criminals, for example by helping them to invest in property or set up front businesses.
ECP2 now uses the term more broadly, incorporating any individual or organisation providing services that enable any economic crime, such as money laundering, corruption, kleptocracy and sanctions evasion.
These services range from asset management to reputation management, and could include solicitors and estate agents involved in the purchase of property with the proceeds of crime, trust and company service providers moving assets to help evade sanctions, or lawyers involved in so-called SLAPPs.
A recent ‘red alert’ on financial sanctions evasion by Russian elites and their enablers from the National Economic Crime Centre (NECC) described enablers as individuals or businesses facilitating sanctions evasion and associated money laundering.
They highlight the legal sector, financial services (including relationship managers, accountants, investment advisors, wealth managers, payment processors, private equity, trust and company service providers), estate agents, auction houses, company directors, intermediaries/agents, and private family offices as ‘key professions’ that could be involved.
A collaborative approach
The broad scope of these terms demonstrates the diversity in the ways that economic crimes can be facilitated, and the extent to which illegal or illicit behaviours and financial flows are embedded in legitimate financial systems, business and social structures.
For example, buying a property will involve an estate agent and a legal professional. Wealth and asset management is likely to involve various advisors, wealth managers and/or corporate service providers. Financial technologies, virtual assets and alternative payment methods are becoming increasingly common in financial services.
This creates challenges for those tasked with preventing economic crime and tackling the individuals, organisations and structures that enable it. ECP2 includes a number of aims intended to do this.
For example, it aims to tackle structural enablers of kleptocracy by strengthening international coalitions and enhancing operational co-operation. (A kleptocracy is defined as ‘a highly corrupted political regime where power has been consolidated for the benefit of a small elite’).
It plans to use public facing communications to impart the message that the UK is not a safe haven for corrupt elites and their enablers. It also includes the key milestone to “Establish and implement a cross-system strategy for tackling Professional Enablers with an emphasis on collaborative working and information sharing”.
The emphasis on a cross-system strategy and collaborative working is important. ECP2 identifies the range of bodies that have a role in developing and enacting this strategy, led by the NECC and including law enforcement, prosecutors, various government departments, regulatory and professional bodies, and the private sector.
It will be important for those within relevant sectors to have a voice in the development of this strategy, to ensure that it takes account of the particular challenges and contexts of different professions and avoid a ‘one-size-fits-all’ approach.
Law enforcement, prosecuting authorities, regulators and professional bodies should work together at force, regional and national level – to ensure that relevant sectors receive timely information on current, specific risks; that good practice is shared and intelligence is exchanged where appropriate; that cooperation occurs in investigations and investigators have access to the specialist knowledge required; and that the range of available criminal or regulatory sanctions are used, targeted appropriately.
The term ‘professional enabler’ has always been contentious. Those sectors most associated with it considered it divisive and misrepresentative, failing to recognise that the majority of individuals working in these professions try hard to comply with their money laundering regulations and creating the impression that criminal intent was more common than inadvertent involvement or errors in AML compliance. It is sometimes used to label whole professions or sectors, which is unhelpful and inaccurate.
The definition in ECP2 describes the behaviour of professional enablers as “deliberate, reckless, improper, dishonest and/or negligent through a failure to meet their professional and regulatory obligations.” The intended strategy will need to take account of the various ways that facilitation can occur and include measures to encourage compliance with regulations and, where relevant, professional standards, and support professionals that are striving to comply.
The enablers of economic crime is an increasingly broad category, incorporating structural factors, individuals and organisations that can enable money laundering, fraud, corruption, sanctions evasion, and tax evasion, amongst others. Strategies to tackle enablers will need to recognise this breadth while ensuring that proposed measures take account of the particular contexts of different professions or sectors, and the different ways that facilitation can occur.
We should aim for better understanding of the points in different forms of criminal and illicit activity at which enablers can play a role (for example, through process tracing methods) and also how the nature of different sectors (for example, the real estate sector and legal profession) creates opportunities and/or vulnerabilities for facilitation to occur.
- The author Dr Katie Benson is Lecturer in Criminology, Programme Director, MSc Financial Crime and Compliance in Digital Societies, Department of Criminology, School of Social Sciences, University of Manchester.