Launch of anti-money laundering and counter-terrorist finance strategy

Today, the Economic Secretary to the Treasury, Ed Balls, and Home Office Minister, Tony McNulty, launched the Government's strategy to combat money laundering and the financing of terrorism.

The strategy, which has been drawn up with law enforcement agencies, policy departments and the private sector, sets out a series of new measures and key priorities for the future, designed to increase the use the financial system as a weapon against international crime and terrorism.

Launching the strategy, Ed Balls said:

"The Government's over-riding goal is to protect its citizens and reduce the harm caused by crime and terrorism. The strategy published today sets out a comprehensive programme of financial measures, supported by UK-sponsored international standards that deter crime and terrorism; detect it when it happens, and disrupt those responsible and hold them to account".

Tony McNulty said:

"Money underpins all terrorist activity. The disruption of terrorist financing is a key element of the Government's overall fight against terrorism. It requires government, law enforcement agencies, and the financial and charitable sectors to work closely together and the measures outlined in the strategy will ensure a partnership approach to the new and increasing challenges we face."

The strategy published today shows that money laundering and terrorist finance laws passed are already helping to save lives and bring criminals and terrorists to justice. It also sets out new measures to promote the Government's key priorities to build on this success, including:

consultation with the charitable sector on measures to keep it safe from terrorist exploitation, with additional funding of £1 million to ensure the Charity Commission has the resources it needs to identify and disrupt terrorist exploitation of charities and protect donor confidence;
further steps to promote the proactive use of asset freezing powers, including the creation of a dedicated Treasury Asset Freezing Unit that will increase the expertise and operational focus that the Government is able to bring to bear on asset freezing in response to advice from law enforcement and security agencies;
new steps to make financial tools a 'mainstream' part of the UK's approach to tackling crime and terrorism, including through new powers to increase their impact, a radical increase in targets for criminal asset recovery, and steps to ensure that Companies House data is fully utilised by law enforcement agencies;
developing further data-sharing between the public and private sectors, and better pooling of intelligence between different public authorities;
reinforced measures to tackle the abuse of money service businesses, including by replacing the current registration system with a licensing system, underpinned by a new action plan for the supervisor, HMRC;
further steps to extend a risk-based approach to regulation - a key principle of the Government's better regulation agenda - including through the creation of a new money laundering supervisors' forum and a commitment to ensure authoritative guidance is available to all regulated industries;
reforms to reduce red-tape, including measures to simplify identification and due diligence checks within revised Money Laundering Regulations and a consultation on changes to the consent and tipping-off rules; and
fresh action at the international level, including through the UK's Presidency of the Financial Action Task Force from July 2007, to identify and tackle the most serious financial threats to international security and ensure an effective international architecture.

Welcoming the strategy as a core component of efforts to combat crime, Sir Stephen Lander, the Director General of the Serious Organised Crime Agency said:

"Tacking criminal finances and profits is central to SOCA's efforts to disrupt serious organised crime. We, therefore, welcome this strategy. It points to the results that have already been achieved and highlights the importance of Government agencies and private sector institutions working together effectively to address money laundering and terrorist financing. For our part, we are already actively pursuing that collaboration, and are looking to make full use of the powerful tools now available both to law enforcement and to regulators to undermine the criminal economy.''

Notes to editors

1. The Financial Challenge to Crime and Terrorism, sets out the Government's strategy for using financial measures to deter, detect and disrupt crime and terrorism. It update to the 2004 Anti-Money Laundering Strategy and builds on recent reforms introduced to help tackle a criminal and terrorist threat that is historically unique in its scale, complexity and international dimensions, including:

a series of reforms to maximise the impact of suspicious activity reports in tracking and tackling criminal and terrorist threats;
new measures to enhance the UK's terrorist asset freezing regime, including new Terrorism and Al Qaeda Orders and new safeguards on the payment of state benefits to the households of terror suspects;
new draft money laundering regulations, now subject to public consultation, which extend and promote a risk-based approach to tackling crime and terrorism; and
significant new investigation powers to help trace and recover criminal assets.

2. Substantial progress has been made in applying financial tools in the fight against crime and terrorism, for example:

the financial trails left by criminals and terrorists now form a central part of the evidential case against them, just like DNA testing in the 20th century;
new data also shows that financial institutions are successfully identifying suspicious financial activity - equivalent to around 20 - 30 per cent of the estimated annual flow of laundered money in the UK;
nearly 200 bank accounts linked to terrorist suspects have been frozen in the UK;
a bridgehead is being built into the criminal economy, with £100 million of assets being recovered annually from criminal gangs and used to fund further action against them and compensate victims;
financial investigations and money laundering prosecutions have increased substantially;
new centres of excellence - including specialist teams created to combat money laundering related to international corruption - are now helping to protect the integrity of the UK's financial system; and
new international and EU agreements have made the financial system an increasingly hostile environment for criminals and terrorists, whilst promoting UK objectives for effective and proportionate financial regulation.

3. The Financial Challenge to Crime and Terrorism can be found online.

4. Media enquiries should be addressed to the Home Office Press Office on 020 7035 3535 or the Treasury Press Office on 020 7270 5238.

5. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk.

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