Anti-money laundering proposals are ‘uninspired and tasteless’, say lawmakers | Bank officer

The Law Commission’s proposals to make directors more accountable for economic crimes in the companies they oversee were condemned as a “thundering disappointment”.

MPs from the All-Party Parliamentary Group (APPG) on Anti-Corruption and Responsible Tax criticized the proposals for England and Wales, published on Friday, as “unambitious, uninspired and tasteless”, saying the Law Commission excluded essential changes that would have made it easier to punish companies and directors for failing to prevent money laundering.

The review was also criticized for concluding that the rules could be left in their current state, listing it as one of the “10 reform options”.

“It would be a farce for the government to take this report as a green light to do nothing,” campaign group Spotlight on Corruption said.

The Commission’s role is to recommend updates to the law, ensuring that it remains fair, modern and simple. The corporate criminal liability review was commissioned in November 2020, but was originally part of promises made by former Prime Minister David Cameron after his 2016 anti-corruption summit.

Professor Sarah Green, commercial law and common law commissioner, said the recommendations were designed to avoid overburdening companies. “Our options for reforming the corporate criminal liability law are designed to strike a balance between ensuring the law works well to punish legal entities when misconduct is committed in their name, while avoiding a new set of burdensome administrative requirements for companies. ”, Green said.

However, Margaret Hodge, the Labor MP who chairs the APPG on anti-corruption and responsible taxation, said the review was a “thundering disappointment” that left “corporate criminals and the enablers of economic crimes off the hook. What was framed as a once-in-a-generation chance for reform left the door open for even more inaction in combating the scourge of dirty money.”

She said investigations, including the FinCEN Archives, demonstrated how big banks were “complicit in laundering dirty money from the worst sources”, adding: “It is unbelievable that money laundering has been excluded from the new crime of ‘failure to prevent’. ”.

Similar reviews of corporate liabilities have led to sweeping revisions to corporate law, Hodge said. “Still, here in Britain we have another unfortunate mistake that will do little to correct our reputation as a safe haven for economic criminals.”

The UK has never sued a bank for money laundering or sanctions violations, the APPG noted, and while regulators imposed £260m fines on banks in 2019, it said the figure was much less than the $3 billion (£2.4 billion) of criminal fines US regulators issued in the same year more than $6 billion for non-criminal misconduct.

Hodge said: “We will never truly reform corporate culture in Britain until there is a real deterrent against misbehavior – that means prosecutions against those at the top and the threat of going to prison.”

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While Spotlight and APPG have cautiously received the recommendation to make it a criminal offense not to prevent fraud, their introduction would not retrospectively apply to Covid commercial loans, of which nearly £5 billion was lost to fraud. However, if adopted, the infraction could prevent similar problems in future schemes.

The recommendations also include holding companies accountable for failing to prevent human rights abuses. This comes after a recent report by the Business and Human Rights Resource Centre, an international NGO, found that 123 attacks on human rights defenders were related to UK business activities between 2015 and 2021. One in five of these attacks resulted in death. of human rights defenders. .

The review will now be passed to the government, which will decide which of the recommendations, if any, to adopt.

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