30/03/23

RUSI experts welcome the Government’s new Economic Crime Plan (2023-2026), but caution that current underresourcing of the Plan risks derailing delivery.

Press release from RUSI, the Royal United Services Institute and its Centre for Financial Crime and Security Studies on Thursday 30 March, 2023.

On 30th March 2023 the UK Government launched its second Economic Crime Plan (2023-2026). The Royal United Services Institute’s team of UK economic crime experts signal a mixed scorecard for this future response.

After a nine-month delay, the UK government has unveiled its Plan for tackling economic crimes including moneylaundering, fraud, kleptocracy and sanctions evasion, with priority areas of

• Reducing money laundering and recovering criminal assets
• Combatting kleptocracy and driving down sanctions’ evasion
• Cutting fraud; and
• Reducing the threat international illicit finance poses to the UK and UK Interests.

With an estimated £100bn in criminal proceeds laundered through the UK every year[1], fraud costing the UK an estimated £136bn per annum[2] and growing concern about levels of Russian-linked and kleptocratic proceeds embedded in the UK economy[3], the publication of the Plan is welcome.

However, RUSI’s experts in its Centre for Financial Crime and Security Studies (CFCS) note that there are concerning gaps in the response, which may derail its impact in practice, including:

• The additional 475 financial investigation staff allocated in the plan are not enough to turn the tide on decades of under-investment in economic crime enforcement.
• The government’s Fraud Strategy, delayed since July 2022, remains unpublished and must clearly put in place a plan for engaging social media and technology companies in the future response.
• The government does not have a long-term plan for removing the assets of sanctioned Russians from the UK economy in a rule of law compliant manner and must look beyond sanctions as the solution to the problem.

Reaction to the Plan by RUSI Experts:

“The Plan aims to improve the policing response to economic crime, but does little to deal with the fact that economic crime represents only 1% of policing resources; the additional 475 staff earmarked in the plan are not enough to stem a multi-jurisdictional, multi-billion pound threat to the UK’s national security.”

Helena Wood – Co-head of UK Economic Crime Programme (Economic Crime Enforcement and Policing Reform)

“The current epidemic of fraud against individuals, business and the public sector continues to have a hugely damaging effect on the UK’s economy, national security and global reputation. The Plan gives due importance to the fight against fraud, but it’s imperative now that the government finally publishes the much-delayed Fraud Strategy.”

Kathryn Westmore – Co-head of UK Economic Crime Programme (Fraud and Regulatory Reform)

“The Plan places a welcome focus on the threat that the proceeds of kleptocracy and corruption pose to the UK’s national security interests. However, the actions in the Plan are a timid starting point. The response to transnational illicit finance needs to move beyond sanctions into long-term criminal justice responses.”

Maria Nizzero – Research Fellow UK Economic Crime Programme (Asset Recovery and Anti-Illicit Finance)

[1] See National Crime Agency estimates in the Economic Crime Plan 2023-2026.
[2] The financial cost of fraud 2021 | Crowe UK
[3] https://www.chathamhouse.org/2021/12/uks-kleptocracy-problem/01-introduction