United Kingdom to Announce Economic Crime Levy to Raise Funds for Anti-Money Laundering Measures

On March 7, Reuters reported that United Kingdom Chancellor of the Exchequer Rishi Sunak is expected to announce next week that the United Kingdom Government will impose an Economic Crime Levy “on banks and other firms regulated for anti-money laundering to raise up to 100 million pounds ($130 million)” for anti-money laundering (AML) measures.

The new Levy – expected to be included in the Chancellor’s first budget on March 11 – would be used “to generate cash for new technology for law enforcement and to hire more financial investigators.”  The United Kingdom Treasury is expected to do a public consultation this spring about which financial institutions would be asked to contribute to the new Levy.  That Levy reportedly would come into force in 2022-23.

Note: The Government’s Economic Crime Plan for 2019-2022 estimated that the scale of money laundering affecting the United Kingdom annually “is likely to be tens of billions of pounds.”  Measures such as the Joint Money Laundering Intelligence Taskforce (JMLIT), which has provided an important vehicle for public-private sector information-sharing, and use of Unexplained Wealth Orders and Account Freezing Orders have improved the Government’s capacity to combat money laundering effectively.

After years of severe funding cutbacks under the Conservatives’ “austerity” budgets, however, law enforcement has needed an infusion of fiscal resources for proper staffing and technological support to deal with, among other issues, the adaptability and sophistication of money laundering organizations.  While the planned levy for that purpose would be welcome, the timeframe for effecting it is far too extended.   As money launderers will not wait another two to three years to refine their methods and techniques, neither should the Government wait to provide critical resources to combat the threat they pose.