Home Office: Looking to hold professional enablers to account
The government yesterday pledged further action to target professional enablers of fraud, like corrupt lawyers, and called for “innovative” approaches to strengthening ethics.
It said too that it would look to strengthen the law to tackle SLAPPs and that moving supervision of lawyers’ anti-money laundering (AML) from legal regulators to the Financial Conduct Authority (FCA) would take “a number of years”.
“The strategy will target professional enablers – the corrupt lawyers, accountants and bankers – who help dirty money flow,” said the Home Office.
“By expanding the use of sanctions and scaling up the National Crime Agency’s capability and coordination, enablers will be hunted down and prosecuted for moving criminal profits.
The UK Anti-Corruption Strategy 2025 said addressing the challenge of enablers required “a multifaceted approach”, including “robust supervision” of at-risk professions, public-private information sharing, “targeted disruptive actions”, and “an emphasis on professional ethics in sectors exposed to corruption risks”.
It said: “Our ambition is to ensure that professional enablers who support corrupt actors to launder money, legitimise wealth and protect their reputations are held to account.
“We will design and implement activities over the next five years to meet this ambition.”
An initial priority commitment included taking action to mitigate risks in the high-risk sectors identified in the National Risk Assessment – legal services is one of these.
“This will include consulting on adding new regulated activities to the money laundering regulations over the lifetime of the strategy.”
The strategy talked too about building “capacity and capability to improve the operational response to professional enablers”, expanding the use of sanctions to target professional enabler networks, and strengthening public and private sector “collaboration and awareness on the threat and risks posed by professional enablers”.
The strategy quoted with approval the report of the Institute of Business Ethics’ taskforce on business ethics and the legal profession, which in April called on law firms to adopt a ‘legitimate provenance of wealth test’ when taking on clients as part of an ethics-based approach that went beyond legal or regulatory tests.
The strategy said: “Professional ethics have a key role to play in addressing the complex challenge of professional enablers of corruption. Innovative approaches to this problem, such as those offered by the taskforce, will be required going forward as a complement to regulation.”
The strategy did not address SLAPPs (strategic lawsuits against public participation) in detail but listed as priority commitments implementing the economic crime-related SLAPPs measures in the Economic Crime and Corporate Transparency Act 2023 and “consider the future approach for comprehensively tackling all SLAPPs”.
The section in the strategy on AML follows the decision in October to move all supervision of lawyers and accountants to the FCA.
Consolidating supervision “will create a simpler, more effective regime,” it said.
“The FCA will have the powers and resources it needs to take more decisive action against non-compliance where it does occur, and the reform will also improve transparency and better align the UK’s regime with international expectations.
“The FCA’s experience of supervising financial services firms and prioritising a data-driven approach in its work will help to ensure the success of this reform and guarantee that professional and financial services firms are held to the same standards.
“The FCA will also be able to co-ordinate more closely with law enforcement agencies with enhanced information-sharing increasing the detection and disruption of sophisticated money laundering schemes.”
The Home Office acknowledged that implementation would “necessarily take a number of years” and said firms would transition to the FCA “in a phased way”.
Sam Tate, partner and global head of regulatory investigations at City law firm Clyde & Co, commented: “The ambition to expand sanctions against corrupt actors and their enablers is particularly notable.
“We need to look closely at how those sanctions are applied and if they are applied to international law firms or global accountancy practices. Historically this has been left more to the specific regulators of professions.”
The AML move “may simplify the current patchwork approach”, he added, “but it probably won’t fundamentally reduce the illicit finance problems facing the City of London”.
Colette Best, director of AML at City firm Kingsley Napley, added: “The upcoming changes in AML supervision for lawyers and accountants has the potential to create greater consistency in enforcement, however they will be a big change for the professions to cope with so the industry is anxious to see details around timing, transitional arrangements and changes to guidance as soon as possible to ensure they can get ready and comply with the new regime.”
Campaign group Spotlight on Corruption said it was “encouraged by the high levels of political buy-in for tackling corruption through this strategy” but that in too many areas – including SLAPPs – “the strategy lacks clear timelines and relies too heavily on future reviews or undertakings to explore action”.
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