Author: Niall Hearty 2 February 2022
Niall Hearty of financial crime specialists Rahman Ravelli considers the UK’s position.
The UK is one of 14 countries accused of failing to comply with international standards for holding companies liable for money laundering.
The Council of Europe has urged 14 of its member states to strengthen their anti-money laundering laws to ensure they meet the requirements of its 2005 convention on money laundering, proceeds of crime and financing of terrorism, which is also known as the Warsaw Convention.
The Council is an international organisation founded after the Second World War to uphold human rights, democracy and the rule of law in Europe. In its review of the Warsaw Convention, the Council says the UK, France and Russia are among the signatories that are not compliant - or compliant “to a very limited extent” - with the requirement that companies are held liable for criminal offences caused by a director’s “lack of supervision or control”.
A total of 36 countries are currently signed up to the convention, including all the EU states apart from Ireland and the Czech Republic. The Council’s review included a series of recommendations on how countries can improve their legislation to make it easier to hold companies accountable for money laundering.
The Council of Europe said existing UK money laundering legislation makes it difficult to prosecute large companies. This is due to the need to show the wrongdoing was committed by someone who was the “controlling mind and will” of the company – a requirement known as the identification principle. But the Council added that the UK government was looking to address the issue with proposed new laws.
It has to be seen as an embarrassment for the UK and France to be bracketed with Russia as among those countries whose anti-money laundering efforts are falling short of the Council’s expectations.
It is timely that the Law Commission recently announced that it will publish in Spring its long-awaited proposals to reform the UK’s criminal corporate liability laws. This comes after intensive campaigning by, among others, the Director of the Serious Fraud Office, Lisa Osofsky. Campaigners have called for change to the identification principle and the extending of ‘failure to prevent’ offences, which may make it easier to prosecute large companies – and satisfy the Council of Europe.
Niall has a wealth of corporate crime expertise and an ability to coordinate global bribery and corruption cases. His achievements in such investigations have made him a logical choice for corporate clients.