U.K. Plans to Invest $495 Million in Economic Crime Crackdown

The U.K. government said it would hire 475 financial crime investigators and change laws around corporate crime as part of a new plan to crack down on economic crime.

The three-year plan, unveiled Thursday, calls for new spending of £400 million, equivalent to $495 million, at several government agencies—£200 million of which will come from the government and £200 million from a levy on the private sector. The government will make a £100 million investment in data analytics and other technology to aid law enforcement.

The newly hired investigators will work to disrupt money laundering and the criminal use of cryptocurrencies, and increase asset recovery, the planning document said. Several agencies will also join to create a group aimed at identifying and seizing illicit cryptocurrencies.

“Economic crime undermines the integrity of our financial system and weakens our national security,” U.K. Home Secretary Suella Braverman said. “Through robust legislation and a strengthened law enforcement response, we’ve come a long way in cracking down on dirty money, but this plan helps us go further.”

The move comes amid an aggressive U.K. push to enforce sanctions and combat kleptocracy in the wake of Russia’s 2022 invasion of Ukraine, and includes a proposal to expand a police group that targets “corrupt elites and their enablers.” London, in particular, has been a popular second home for Russian oligarchs. In addition to targeting “corrupt elites,” the government explicitly called out “criminal gangs.”

But the U.K. government also promised measures that would make it easier for prosecutors to tackle corporate crime more broadly. It committed, for example, to legislative changes that would amend U.K. law to make it easier to prosecute companies for crimes done by employees.

Unlike in the U.S., where companies are largely on the hook for employee misdeeds, U.K. companies in many circumstances can only be held accountable directly for corporate crimes when upper-level management had criminal intent. In large companies with diffuse corporate hierarchies, that legal bar can be difficult to meet. The government has proposed passing legislation that would change the application of that legal doctrine.

The U.K. government has also said it would change the law to let companies be prosecuted in certain instances for failures to prevent fraud, an approach the country already takes in bribery cases. This type of legislative change is already being debated in Parliament, and the proposal doesn’t make clear what exact legal language the final law might adopt.

The government also intends to modernize the processes by which prosecutors disclose evidence to criminal defendants. Prosecutors have complained that the current system wasn’t designed for the digital age and is unwieldy in cases involving large amounts of electronic documents.

The Serious Fraud Office, which handles major corporate crime cases in the U.K., this month abandoned a long-running case over an alleged corporate fraud against the government after a lawyer for the agency noted disclosure-related issues.

The ultimate shape the planned legal changes will take remains to be seen, but prosecutors have long sought after some version of the proposed overhauls, said Rebecca Dix, a former Serious Fraud Officer lawyer who now works in the London office of the law firm Dentons.

“It definitely is hitting the right spot,” she said.

Given the large global threat that financial crime poses, the promised level of funds and staff seems “woefully inadequate,” said Sarah Lambert-Porter, a London-based lawyer at the firm Ropes & Gray LLP.

“Resourcing is the most significant obstacle to increasing the U.K.’s effectiveness in addressing the threat of illicit finance and economic crime,” she said.

Source: The Wall Street Journal

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