The government is asking bankers and lawyers to provide positive accounts detailing how they prevented illicit funds from entering Britain, as ministers attempt to demonstrate that the nation’s anti-money laundering mechanisms function properly. According to a government call for evidence, officials want real-life examples with clear, demonstrable results to prove the country’s anti-money laundering controls actually work in practice.
This scramble for success stories comes as the UK prepares for a high-stakes evaluation by the Financial Action Task Force (FATF). Ministers are eager to counter persistent allegations that London remains a global laundering hub, particularly following a dismal 2018 assessment by the international crime watchdog. The Treasury’s evidence packet must be submitted by October, ahead of an on-site review by FATF examiners scheduled for next summer.
The £100bn Challenge and FATF Scrutiny
Proving the City has cleaned up its act will be difficult. During the previous year, calculations by the National Crime Agency indicated that £100bn is being laundered through or within the UK every single year, with City firms providing legal and financial services for fraudsters, human traffickers, the illegal drug trade and other types of organised crime.
Furthermore, the UK’s national risk assessment on money laundering and terrorist financing has classed the UK legal sector as “high risk” for every one of its assessments since 2017. Rating agency Moody’s noted in a report published earlier this year that the pressure on the UK’s anti-money laundering regime is intensifying as the 2027 mutual evaluation approaches.
“Billions are spent each year in the UK on supervision with hundreds of firms refused entry to the financial system following due diligence, yet an estimated £100bn is still laundered annually,” Moody’s stated in the report. “When FATF examiners arrive in the UK, they may ask how much of that risk is really being reduced by the UK’s controls, intelligence and enforcement, and how quickly.”
What the Treasury Wants From City Firms
To build a comprehensive defense for October, the Treasury is leaning directly on the private sector. Authorities have requested that financial institutions and corporate entities supply instances dating from 2022 forward that illustrate instances of dropping or turning down potentially hazardous clients.
This includes scenarios where a company’s intervention subsequently triggered an official state probe or criminal prosecution. In addition, the authorities have requested corporations to supply instances where customer profile checks exposed warning signs of financial wrongdoing, alongside details of how these discoveries influenced the categories of clients the business ultimately agreed to serve.
“We take firm and coordinated action across government and industry to crack down on economic crime,” a Treasury spokesperson said. “We have introduced new strategies, enhanced enforcement capabilities and increased funding designed to disrupt those seeking to abuse the UK economy. As you would expect, the government regularly engages with industry on this – and preparations for the FATF assessment in 2027 are no different.”
Emerging Threats in Financial Crime
Aside from standard laundering routes, anti-money laundering watchdogs are remaining watchful regarding modern threats, such as a sharp rise in artificial intelligence-driven investment scams alongside the rising adoption of cryptocurrencies, which can obscure the origin of financial transfers.
These sophisticated threats complicate the narrative the government wants to present to FATF examiners. While thousands of due diligence checks block many bad actors, the sheer volume of illicit wealth moving through the UK economy keeps regulatory pressure at a maximum.
Did You Know? The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog, setting international standards that member countries must enforce.
Frequently Asked Questions
Why is the UK Treasury asking banks and law firms for success stories?
The Treasury is gathering real-life examples to prove to the Financial Action Task Force (FATF) that the UK’s anti-money laundering controls are effective in practice, ahead of an upcoming evaluation.
How much money is estimated to be laundered in the UK each year?
According to National Crime Agency estimates cited by Moody’s, an estimated £100bn is laundered through or within the UK annually.
What specific time frame are the requested case studies covering?
The Treasury has asked City firms to share cases dating from 2022 onward that show how they dropped high-risk clients or triggered state investigations.
When is the next major FATF evaluation for the UK?
The next FATF mutual evaluation is scheduled for 2027, with the assessment team visiting the UK for an on-the-ground review next summer following evidence submissions in October.
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