Ministers urged not to water down money laundering rules to strike 'buccaneering' Brexit trade deals

Posted On: 
8th March 2019

Britain's efforts to fight international money laundering must not be watered down to land post-Brexit trade deals, a powerful committee of MPs has warned.

The Treasury Committee hit out at Britain's 'fragmented' system for tackling economic crime.

The Treasury Committee urged ministers not to bow to "buccaneering" voices and compromise on the clampdown against economic crime after Britain leaves the EU.

In a new report, the cross-party group of MPs urged the Government to address the UK's "highly fragmented" system for tackling money laundering.

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And they called on the Government to do more to identify the scale of money laundering - with estimates ranging from the tens of billions to the hundreds of billions.

Brexit would, the committee said, "provide both risks and opportunities" in tackling economic crime - with the group of MPs warning that an increase in trade with non-EU countries would "increase the likelihood that UK businesses will come into contact with markets with lower" anti-money laundering standards.

"With the uncertainties of Brexit around the corner, the Government should regularly review the UK’s effort to combat money laundering to ensure a constant stimulus to improve," committee chair Nicky Morgan said.

The Conservative MP added: "When the UK does leave the EU, there will be both risks and opportunities in terms of economic crime.

"The Government must ensure it does not bow to buccaneering deregulatory pressures and maintain its intentions to lead in the fight against economic crime.

"Leading that fight is going to require focus.

"The Government needs to bring greater order to a fragmented supervisory system, better identify the scale of the problem, and make a greater effort to combat the known risks and gaps in the supervisory system."

Elsewhere in its report, the committee took aim at estate agents for "failing to protect the UK from proceeds of corruption being stashed in the property sector".

They called on the Government to make sure estate agents are registered with HM Revenue and Customs - and called for ministers to consider handing new powers to Companies House to allow it to carry out money-laundering checks when new companies are set up.

That call was welcomed by anti-corruption charity Global Witness.

Spokesperson Nienke Palstra said: "We know the UK is a favourite for the criminal and corrupt looking to stash stolen money or secure safe haven - and anonymous companies have made this easy.

"Giving Companies House the resources and mandate to police their company register will address a glaring gap in the UK’s money-laundering defences."