UK government seeks to stop London’s £90bn ‘dirty money’ problem
UK home secretary Amber Rudd has pledged to end the City of London’s reputation as a safe haven for “dirty money". Speaking on Thursday at a Financial Conduct Authority (FCA) conference, Rudd claimed that £90bn is laundered through London each year at a cost to the country of £24bn. Last month, the government launched its criminal finances bill which proposes “unexplained wealth orders” to make it harder to conceal money’s provenance. The FCA has called for a central database of suspicious transactions and for the government to abandon plans to make officials criminally liable for failing to report suspected laundering.

The home secretary has vowed to stem the flow of “dirty money” into the City of London in an attempt to end its reputation as a safe haven for “criminals and corrupt kleptocrats” to hide their money.

Amber Rudd highlighted a National Crime Agency estimate that £90bn is laundered via London each year.

Rudd conceded that the UK has much more work to do to prevent financial crime, which she called a “national security threat” that costs the UK £24bn a year and undermines its reputation as a place to do business.

“I’m deeply concerned by claims London is a major global money-laundering centre,” Rudd said at a conference hosted by the Financial Conduct Authority, the City regulator, on Thursday.



“The UK is attractive to criminals and corrupt kleptocrats who steal billions from their own people, often some of the poorest people in the world. We will reduce the flow of dirty money into the City.”

The government last month unveiled its criminal finances bill, detailing measures to make London less attractive to international criminals as a place to launder money.

Amber Rudd. Photograph: Niklas Halle'N/AFP/Getty Images

Measures in the bill aimed at money laundering include new unexplained wealth orders, under which people suspected of trying to launder the proceeds of crime will be asked to explain the source of their money.

If they cannot, assets such as property can be seized to ensure criminals are unable to launder their cash by investing in property.

Rudd also said that an online raid in which hackers stole from thousands of Tesco Bank customers last weekend indicates the UK has yet to “make a dent” in the growing threat of cybercrime.

“The recent events at Tesco Bank are a stark example of what we face,” she said.



“It’s clear that for thousands of hard-working people [...] public confidence in our institutions gets shaken by this sort of event.

“The [Tesco] incident served to demonstrate that the private sector has a crucial role and a responsibility in countering cyber-enabled fraud,” she added.

“While we have made some good progress and taken some significant steps forward, we haven’t yet put a dent in the problem. The threat remains great and there is very much more to be done.”

The FCA’s head of financial crime, Rob Gruppetta, hailed government efforts to tackle financial crime as a “positive step in the right direction”.

But he also proposed a series of measures that the regulator believes would beef up companies’ defences.



The measures include a centralised database of suspicious transactions, which could help firms save money on building their own systems and make it easier for them to share data with other firms and law enforcement agencies.

Gruppetta also said the government should rethink rules under which officials tasked with reporting suspected money laundering can be held criminally liable for failing to do so.

He said this could be doing “more harm than good” because it leads to overly conservative reporting. Rules that make banks legally liable if they share flawed information on financial crime with rival companies should also be relaxed, he said.

The FCA chief executive, Andrew Bailey, called on companies to make the UK a “hostile environment” for financial criminals by making better use of technology.

The regulator was ticked off by the Treasury select committee earlier this week for the lack of technical experts among its board of directors, particularly in the light of the hack of Tesco Bank.