Documents to download

Please note that this briefing paper is no longer being updated but is kept here for readers seeking further detail. The most recent relevant briefing is Economic crime: The UK’s multi-billion pound problem.

As part of the general anti-money laundering effort by international agencies there is a separate section on ‘politically exposed persons’ (PEPs).

Due to their position and influence, it is recognised that many PEPs are in positions that can potentially be abused for the purpose of committing money laundering offences and related offences such as corruption and bribery or terrorist financing.

Laws on money laundering are agreed internationally and, in the UK case, promulgated by EU Directive. The Third Money Laundering Directive (effected by secondary legislation) is the main source of UK law, due to be amended by a Fourth Directive.

PEPs face extra scrutiny – customer due diligence – on their financial transactions. The scrutiny extends to a wide range of activities, to their immediate family and associates and can continue beyond their tenure in office.

Evidence suggests that the degree of scrutiny may have increased in recent years reflecting a broader ‘de-risking’ by banks due in part as a response to regulatory sanctions for past failures.

Another Library Paper (Money Laundering Law) deals with the evolution of regulation in more depth and another (Bank Accounts problems of identification) deals with the specific issue of difficulties in opening bank accounts because of a lack of identification.

Documents to download

Related posts

  • The scale of money laundering, fraud and other economic crime in the UK, is thought to run to tens or hundreds of billions of pounds per year. In December 2019 the Treasury Committee found various regulatory and legislative failings in the way in which these crimes were being tackled in the UK. It urged the Government to make improvements to the supervisory system and to introduce new powers to combat economic crime. The Government agrees about the need to tackle these crimes. It set out its overall approach in its July 2019 Economic Crime Plan. The Plan covers the years 2019-2022 and draws together all the work being conducted by the public and private sector. The Royal United Services Institute said that as at September 2020, 23% of actions in the plan had been completed, 59% were in progress, 9% were overdue, 6% of actions either had no due date or had been paused.