UK ‘could do more to defend depencies’

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That is the view of Transparency International, a non-governmental organisation set up in 1993 to combat corruption.

heir latest report – written by the chairman of the Gibraltar Financial Services Commission, Marcus Killick – warns that unless tougher measures are taken to curb money laundering, the UK’s reputation as a global financial centre may be at risk.

The organisation says the scope of the problem is ‘staggeringly large’, with an estimated £18 billion of dirty money laundered through the UK every year.

It makes 18 specific recommendations to extend the UK’s anti-money laundering regime.

ut the report looks more favourably on Jersey, Guernsey and the Isle of Man and says that in addressing some due diligence issues the islands have been more proactive than the UK.

It suggests that although the quality of regulation in the dependencies has not been adequate in the past, accusations would be ‘seriously misplaced’ now that sophisticated anti-money laundering legislation has been introduced.

n particular Jersey, Guernsey and the Isle of Man were more proactive than the UK in issuing a joint consultative paper Overriding Principles for a Revised Know Your Customer Framework in 2000, before the introduction of the All Crimes Legislation in the UK.

r Killick states: ‘There is a gradual recognition by the international community, if not by the media, that there is a clear distinction between a well-regulated offshore centre and under-regulated ones.

The well-run centres can set an example to a number of onshore jurisdictions, such as in the regulation of company and trust service providers.

‘In respect of dependencies, the UK can do more in particular by defending the well-regulated dependencies from unjustified criticism.

CarrotThe organisation urges the continuance of international efforts to encourage jurisdictions to improve their anti-money laundering regimes, but says that to achieve this there must be greater recognition of those who have done so, ‘thereby providing a carrot to go with the stick’.

r Killick also argues that the government should do more to separate the arguments on money laundering from those on ‘unfair’ tax competition.

‘These two issues are not linked nor should they be permitted to be so.

Tax is only relevant to money laundering when tax evasion is concerned,’ he said.


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