Partners on crime – FSA on fraud & HM Treasury on laundering

The UK Financial Services Authority has four statutory objectives under the Financial Services and Markets Act 2000, one of which is to reduce the extent to which its regulated sector may be exploited for the purposes of financial crime. The FSA has been very active on the money laundering front and, since 11 September 2001, in the area of terrorist financing, but, until recently, it was conspicuously silent about fraud. All changed when it announced its policy on fraud to a packed audience in central London at the end of October. Timon Molloy reports.

Timon Molloy, Editor

Fraud first, at last

Even its fiercest opponents cannot deny that Her Majesty’s Government has launched some major initiatives against economic crime, in the shape of the Proceeds of Crime Act 2002 (POCA) and creation of the Assets Recovery Agency (ARA), with powers to confiscate criminal property according to a civil burden of proof that it derives from criminal conduct. The legislation may be “ground-breaking”, it may have “revolutionised” the whole approach to financial crime, as Leigh Lewis, Permanent Secretary, Crime, Policing, Counter Terrorism and Delivery, Home Office, claimed at the FSA’s recent Fraud and Money Laundering event, but much remains undone. Mr Lewis acknowledged the political reality when he said that financial crime would not be made a priority over other volume offences, “Money is tight and always will be,” he said. The decline in the number of police officers who work on fraud is a case in point.