‘All mouth and no trousers’? The new focus on the fight against economic crime, illicit finance and serious and organised crime in the Integrated Review

‘All mouth and no trousers’? The new focus on the fight against economic crime, illicit finance and serious and organised crime in the Integrated Review

  1. In its first review of the UK’s security capabilities both at home and abroad since 2015, the Government in its ‘Integrated Review’ (IR) sets out its policy agenda in respect of security, defence and foreign policy for the next four years to 2025. Significantly, we see for the first time in such a review, that the fight against “economic crime” (as well as the inextricably linked issues of “illicit finance” and “serious and organised crime”) is identified as one of the government’s top “priority actions”, recognising that such issues pose a real national security threat to the UK, given the fact they are not confined to the UK’s borders but can arise from any bad actor worldwide and particularly so given the continued rise of cybercrime.

  1. The IR has a distinctly optimistic tone and reads like a wish-list of hoped-for outcomes. In respect of how the government proposes to tackle “economic crime” and “illicit finance”, sharp focus has been given to the 2019 Economic Plan which intends to “overhaul” the Suspicious Activity Report (SAR) regime; “bolster” the National Economic Crime Centre (NECC); and introduce new legislation “that tackles economic crime, including the use of UK corporate structures in facilitating high-end money laundering” as well as a reform of Companies House registration. A total of £83 million has been pledged to implement such measures. In contrast, when it comes to addressing “serious and organised crime” (which is, inexplicably, dealt with in the IR as a separate threat to “economic crime” and “illicit finance”), no new funding has been promised, despite the fact that the government proposes to “strengthen” the National Crime Agency (NCA) and increase policing capacity within Regional Organised Crime Units amongst other aims. Although an investment of £275 million has been promised to the Criminal Justice System (CJS) “to help bring more offenders to justice” no further detail has been given as to how those funds will be apportioned within the CJS or how exactly that ambitious aim will be achieved.
  2. It might also be said that these suggested new measures are simply not needed as there are already plenty of tools available to the UK authorities in detecting and punishing economic crime, whether it be in the form of Unexplained Wealth Orders (UWOs), Account Freezing Orders (AFOs) or Restraint Orders (ROs). So far however, such powers have not been used to their maximum effect. Only five UWO’s have been made since they were introduced as an additional tool three years ago, and AFOs and ROs have arguably only been used for low level matters. Notable by its absence, with a single exception, has been the use of UWO’s to target those suspected of involvement in organised crime whose assets appear to outstrip their earnings. For those lawyers operating in this field the truth remains as it always has: use the powers that already exist (and at pace), and justify the actions with evidence based on objective analysis not supposition.
  3. It remains to be seen whether such big promises will be converted into measurable action and whether those new policies will have any real deterrent effect on criminality. Crucially, any implementation of the measures will need to ensure that individuals’ fundamental rights are protected: the suggestion of piloting “Serious Crime Prevention Orders” in order to “prevent crimes before they happen” gives particular cause for concern. Whilst the IR suggests that economic crime has been pushed higher up the political agenda and the measures appear to be well-intentioned and wide-reaching, it remains to be seen what this will mean in practice. Will government and law enforcement departments collaborate in new ways as suggested? Will these measures have any real effect on the criminal justice system as a whole? Perhaps, most importantly however from the legal professional’s perspective, will these new measures ensure that proper legal process is upheld and individuals’ fundamental human rights are protected?

Michael Drury’s expertise in data collection and surveillance matters by state entities is unparalleled in the United Kingdom. As a former director of legal affairs at GCHQ, the largest of the UK’s security and intelligence agencies, for 14 years; founder member of the Serious Fraud Office; and for the last 10 years a partner in BCL providing advice on national security and criminal investigations to both corporate and individual clients, his breadth of experience both in terms of developing legislation (particularly the Regulatory Investigatory Powers Act as the forerunner to the current Investigatory Powers Act 2016) and practical casework gives him unique insights into how the law has developed and the practical consequences that follow. He has already provided advice on the US-UK Bilateral Data Sharing Agreement due to commence this autumn and brings his breadth of knowledge to bear on what is a new departure in a field that is inherently controversial.

Caroline Mair is a BCL barrister specialising in financial crime investigations and anti-money laundering regulatory matters. She has a breadth of experience; notably since joining BCL in 2010 she has advised an individual implicated in a lengthy cross-border investigation concerning the alleged manipulation of LIBOR and has also assisted in defending two individuals charged with conspiracy to cheat HMRC in relation to a multi-million pound film investment scheme fraud – the first prosecution of its kind to be brought. Caroline has developed her regulatory practice in advising regulated persons in relation to their anti-money laundering obligations under the complex 2017 Money Laundering Regulations.

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