Balls unveils crackdown on money laundering
Wednesday, 28 February 2007
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The self-styled City minister Ed Balls will announce today the creation of an "asset freezing" unit at the Treasury to target criminal and terrorist bank accounts as part of a sweeping crackdown on money laundering.
Mr Balls will also announce new measures to "safeguard the charitable sector from terrorist abuse" with an additional £1m of funding to the Charity Commission to ensure it has the resources to "disrupt terrorist exploitation of charities and protect donor confidence".
Other measures to be announced include the creation of a licensing system for "money services businesses" such as money transfer services and bureaux de change, underpinned by a new action plan from HM Revenue & Customs for regulating them.
Law enforcement agencies will be required to make proper use of data held at Companies House while new targets will be set for the recovery of "dirty money".
Mr Balls also said he wanted to improve data sharing between the public and private sectors and create a new Money Laundering Supervisors Forum.
The strategy has been drawn up jointly with the Home Office minister Tom McNulty, working with law enforcement agencies and the private sector.
The strategy is being launched before Britain takes the presidency of the Financial Action Task Force (FATF) in July. The intergovernmental body's goal is to combat the laundering of dirty cash and strangle the flow of funds to terrorist organisations.
The FATF recently voiced alarm over misuse of charities to provide funding for terrorists. It said: "The misuse of non-profit organisations for the financing of terrorism is coming to be recognised as a crucial weak point in the global struggle to stop such funding at its source."
It has demanded that all countries "review the adequacy of laws and regulations that relate to entities that can be abused for the financing of terrorism. Non-profit organisations are particularly vulnerable, and countries should ensure that they cannot be misused by terrorist organisations".
Mr Balls will say: "The Government's overriding goal is to protect its citizens and reduce the harm caused by crime and terrorism. We know that finance is the lifeblood of terrorist operations."
However, Mr Balls sought to ease the pressure on businesses by introducing measures to simplify onerous identification and due diligence checks.
Angela Knight, who heads the British Bankers' Association, said: "The BBA has taken a lead in many of the measures to tackle financial crime and terrorist funding with the Joint Money Laundering Strategy Group. We will be wanting to work closely with the Treasury on this."
The Financial Services Authority, which imposed a series of heavy fines on banks for having "weak" anti-money laundering controls a couple of years ago has been consulted on the plans.
