HMRC discusses actions taken to tackle the threat to the accountancy sector from professional enablers...
When we talk about crime, and the harm it causes to communities and individuals, money laundering is rarely more than an afterthought. It shouldn’t be; money laundering is key to organised crime. Without the ability to wash dirty money, criminals would struggle to further their operations and hide their assets. Money laundering underpins and enables organised crime.
Professional Money Launderers – or PMLs – are people who, for a fee, provide services to organised crime groups (OCGs) by laundering the proceeds of their crimes. They launder for multiple OCGs and don’t concern themselves with how the proceeds were generated. In other words, they’ll just as happily launder for drug traffickers or human traffickers as they will for tax fraudsters.
PMLs operate globally. They facilitate the movement of dirty money through multiple jurisdictions and are often based in countries where they (wrongly) think they are out of reach of UK Law Enforcement. We also know they use multiple methods and schemes to hide the true source of funds. This includes using the expertise, skills, influence or access of others.
People working in regulated sectors, such as accountants, are of great interest to PMLs. By exploiting regulated and professional businesses or individuals, PMLs can increase the veneer of legitimacy for their laundering techniques. They try to hide in plain sight and hope the system isn’t dynamic enough to catch them.
Through HMRC’s criminal investigations, we have identified several ways in which accountancy professionals can be used in money laundering schemes. For example, PMLs might utilise trust and company formation services to conceal the ownership of criminal assets and/or facilitate the movement of illicit funds through secrecy jurisdictions.
They may use criminally complicit professionals to falsify accounting through false bookkeeping or to create false documents in order to facilitate trade-based money laundering. For those individuals, in addition to using all the tools HMRC has to disrupt their activities, we are working with supervisors to share insight, intelligence and leverage other capabilities to make professional life for these complicit individuals extremely difficult.
However, we suspect that many accountancy professionals used by PMLs will likely be unaware of their role in facilitating multimillion pound money laundering schemes. In such circumstances, we don’t try to make life difficult for them. Instead, we want to focus on education, building understanding and helping professionals spot PML exploitation and take the necessary next steps.
The more we know about PMLs, the better we can respond. The submission of Suspicious Activity Reports (SARs) is key to this. These reports are of significant value to HMRC, including in ways that are not immediately apparent. For example, we use all non-sensitive – that is, TF focused - SARs as part of our routine risking processes, including our ongoing intelligence development against identified PMLs.
We are reaching out right across the regulated sector to reinforce the value of SAR reporting to help us build our understanding of PML networks. If you’d like more information about SARs and how to submit a high-quality SAR, visit the NCA’s SAR webpage.
But we also want to listen to the experiences of the accountancy sector more generally and hear the thoughts and views of accountancy professionals themselves. Apart from SARs, are there other opportunities for the public and private sector to work together to tackle Professional Money Launderers? Is there an opportunity to better use technology? Where should we focus our educational efforts, and can we do so jointly? We’d be really interested to hear your thoughts.
If you want to learn more about PMLs, sign up for our webinar.
The webinar will be an opportunity to hear about the methodologies we’ve currently identified, how PMLs operate and what we are doing to disrupt them. There will also be a chance to discuss the role of the accountancy sector.
This article was provided by HM Revenue & Customs and is current at 25 April 2023.
