Criminals are using professionals to ‘clean’ their dirty money

Earlier this year, the National Crime Agency suggested that money laundering costs the UK an estimated £24 billion each year, rising to hundreds of billions of pounds when considering the sums being laundered through UK banks annually.  The signs of money-laundering aren’t always obvious, but the impact is wide-ranging.

Money laundered by criminals, who employ a variety of techniques in order to circulate dirty money through regulated bodies unaware of the origins of the proceeds, is big business. This rogue trading enables criminals to improve and expand their operations, transferring financial power to the underworld and ultimately funding socially destructive activities. Money laundering can put people out of work, bring businesses to financial ruin, and even cost lives.

According to the NCA, thousands of employees from the accounting world, along with others in the legal and property sectors, are at daily risk of being targeted by these criminals who use professionals in order to disguise money being laundered through the financial system.

It’s for these reasons that AAT is backing the Government’s Flag It Up campaign, urging our 140,000 members to ‘flag up’ any suspicions they may have about potential ‘dirty’ money. The campaign has been revamped with the strapline ‘Dirty Money. Know the signs, report the crime’, underlining the fact that accountants themselves are liable for prosecution if they ignore the warning signs.

Red flags for accountants to look out for include:

• whether clients are overly secretive or evasive;
• if the amount or source of funds seems unusual;
• if there are odd discrepancies in client transactions or business activities.

If any accountant believes they may be at the slightest risk of being caught up in criminal activity, the campaign urges them to raise a suspicious activity report (SAR), available on the Government’s website, which will help protect them from the reputational risks, fines and prosecution that may result from ignoring potentially harmful activity.

It’s everyone’s responsibility within the industry to get this right – indeed it’s a legal requirement following updated laws on money laundering, introduced in 2017, meaning that companies must ensure their employees are confident in the work they are carrying out in this field. It is therefore essential to conduct the necessary due diligence in order to ensure you’re not doing business with individuals who are trying to cover up the sources of their wealth.

For additional information about the ‘Flag it Up’ campaign, or more advice on how to tackle money laundering, please visit FlagItUp.campaign.gov.uk

Adam Williamson is AAT's Head of Professional Standards.