UK second in money laundering hall of shame

The second highest amount of money is laundered every year in the UK, with an estimated £88 billion worth of money cleaned up by criminals every year.

Only the US sees more, with £216.5bn laundered each year, while France (£54.5bn), Germany (£51.3bn) and Canada (£25.6 billion) also rank among the top five countries in terms of value of money laundered.

Figures from identity verification software maker Credas Technologies, collated using OECD data, also revealed that around £1.8 billion is laundered globally each year, or around 3 % of total GDP.

Money laundering, and its links to organized crime, is a serious global problem of which banks are at the center, with their inability to spot suspicious activity partly to blame for the high volumes and value of money cleaned up by criminals in the UK.

In October NatWest Bank admitted that operational failings, including weaknesses in automated surveillance systems, meant it had failed to prevent the money laundering of £400million. He pleaded guilty in Westminster Magistrates’ Court to failing to comply with anti-money laundering regulations between 2012 and 2016.

Following the admission, the bank’s CEO, Alison Rose, said: “In the years since this case, we have invested significant resources and continue to strengthen our efforts to effectively combat financial crime.

Technology is key to reducing money laundering, with systems using technologies such as artificial intelligence that analyze transactions and highlight suspicious activity.

Tim Barnett, CEO of Credas Technologies, said: “The practice of money laundering is as old as the hills; it is an area of ​​criminal activity that is incredibly difficult to eradicate, as it can be done in such a vast and varied number of ways.

“It’s also a practice that continues to evolve over time, and in recent years we’ve seen criminals using online banking, cryptocurrencies and, more recently, NFT markets, in order to wash the ‘dirty money.”

Financial Conduct Authority regulations mean that financial companies must have adequate anti-money laundering systems and controls in place. Anti-money laundering software automates the monitoring of suspicious activity on a bank’s network.

In Germany, neo-bank N26 was fined 4.25 million euros by the German financial services regulator for weak anti-money laundering practices related to the late filing of around 50 reports suspicious activities in 2019 and 2020.

But there were much higher fines. Swedbank was fined €347m by Swedish and Estonian regulators in 2020 for breaking money laundering laws, Dutch bank ING was fined €775m in 2018 for not having prevented the laundering of hundreds of millions of euros between 2010 and 2016, and in 2017Citigroup agreed to pay nearly $100 million and admitted criminal offenses as part of an investigation into anti-money laundering rule violations involving money transfers between the United States and Mexico.