The UK government has published its second Economic Crime Plan (ECP2), which aims to reinforce the government’s priorities in relation to economic crime in (or affecting) the UK. ECP2 arrives at a time of considerable political attention on economic crime, with the global focus on kleptocracy and increased use of financial sanctions following Russia’s invasion of Ukraine, the rise of illicit finance as a national security issue, and the increasing role of financial technologies and cryptocurrencies in financial crime. It sets out a series of actions intended to achieve its three key outcomes – to reduce money laundering and recover more criminal assets, to combat kleptocracy and drive down sanctions evasion, and to cut fraud. In this article, Dr Katie Benson considers the focus on ‘professional enablers’ in ECP2, assessing how the term is defined and what falls within its scope, and making recommendations for how the Plan can be taken forward.
- The term ‘professional enabler’ covers an increasingly wide range of individuals and organisations that provide services that can enable money laundering, kleptocracy, sanctions evasion, and other economic crimes.
- Policymakers must take account of this diversity when developing measures to prevent enabling activity.
- Proposed strategies for tackling professional enablers should look to inhibit the structural factors that create opportunities for enabling economic crime.
- Strategies should be developed and enacted in collaboration with relevant sectors, to understand the contexts of different sectors and encourage cooperative working at all levels of prevention, investigation and enforcement.
Defining ‘professional enablers’
ECP2 defines a professional enabler as “an individual or organisation that is providing professional services that enable criminality. Their behaviour is deliberate, reckless, improper, dishonest and/or negligent through a failure to meet their professional and regulatory obligations.” This broad definition allows inclusion of the wide range of individuals and organisations that provide services that can enable various types of criminal activity. It doesn’t identify particular professions or sectors, though the term is commonly used to refer to those in the legal, financial, company service provision, and property sectors. The definition incorporates a spectrum of ways that enabling activity could occur – from deliberate to negligent behaviour.
As the bodies leading on developing a strategy for tackling enablers, it is important that the Home Office and National Economic Crime Centre (NECC) recognise the diversity that this definition encompasses and the particular contexts of different professions, sectors and types of organisation. Anti-economic crime measures should also support the many professionals within these sectors that are striving to comply.
Kleptocracy, sanctions evasion and their enablers
ECP2’s aim to ‘combat kleptocracy and drive down sanctions evasion’ reflects a growing focus on the threat posed by kleptocracy and corruption to the UK and use of financial sanctions in the aftermath of Russia’s invasion of Ukraine. (A kleptocracy is defined as ‘a highly corrupted political regime where power has been consolidated for the benefit of a small elite’). This has highlighted a new category of enablers – those who facilitate sanctions evasion and the asset- and reputation-management of corrupt elites. Key professions that enablers can be found within ‘include (but are not limited to) legal (barristers and solicitors), financial (relationship managers, accountants, investment advisors, wealth managers, payment processors, private equity, trust and company service providers), estate agents, auction houses, company directors, intermediaries/agents, and private family offices’.
This further underlines the diversity of sectors that could fall under the ‘professional enabler’ or ‘enabler’ label, and of types of criminal or illicit activity that can be facilitated by or through these sectors. Strategies to address this problem should identify the points in different forms of criminal and illicit activity at which enablers can play a role. They should also identify how the nature of different sectors creates opportunities and/or vulnerabilities for enabling behaviour.
Developing an effective strategy
A key milestone of ECP2 is to ‘Establish and implement a cross-system strategy for tackling Professional Enablers with an emphasis on collaborative working and information sharing’. The emphasis on a cross-system strategy and collaborative working in this milestone is critical. My research demonstrates the need for a strategy that combines measures for improving compliance, enforcement and prevention, and involves bodies from across the criminal justice system and regulated sectors. These measures should:
- Enhance the means and desire to comply with relevant legislation, regulations and professional standards. For example, training and guidance provided by regulators should be up-to-date, clear and easy to apply, taking account of different types of sector/organisation. Regulated sectors should receive timely information on current risks from law enforcement and regulators. Regulators should highlight the professional and financial consequences of non-compliance.
- Ensure meaningful and appropriate enforcement of existing laws, regulations, and professional standards. Law enforcement and regulators should work together at force, regional and national level, aiming for effective collaboration and intelligence sharing. Potential enablers should be considered in all relevant criminal investigations – at force, regional and national level – and all available criminal and regulatory sanctions should be considered.
- Identify and inhibit structural factors that provide opportunities for enablers or make certain sectors vulnerable to being exploited for criminal purposes. Some of these structural factors may include ineffective oversight of processes or transactions within firms, weak or non-existent supervision of sectors, and lack of transparency in real estate ownership.
While the problem of professional enablers has been discussed for a number of years, the Economic Crime Plan provides the first time-specific aim to set out a comprehensive strategy for tackling them. This will not be an easy task. It is important that the Home Office, NECC and OPBAS (Office for Professional Body Anti-Money Laundering Supervision) recognise the challenges and complexities in developing such a strategy. They should consider the different types of individual and organisation that can enable different forms of economic crime, and the role of particular professional contexts in shaping opportunities for enabling behaviour. They should include measures to support professionals that are striving to comply. They also need to include members of relevant sectors in the planning and implementation of this strategy, and commit to a collaborative approach at all levels of prevention, investigation and enforcement.