Lammy: Law firms should have been prosecuted over dirty money

Lammy: Targeting professional enablers

It is wrong that no law firms have been prosecuted for criminal breaches of anti-money laundering rules “despite the mountains of evidence”, the shadow foreign secretary has said.

David Lammy promised that a Labour government would target professional enablers as part of a major attack on dirty money passing through London and overseas UK territories.

He made the comments last month in an address to a conference, ‘The anti-corruption capital of the world?’, organised in London by the IPPR thinktank.

Mr Lammy noted that, just days before, deputy foreign secretary Andrew Mitchell had said that nearly 40% of the world’s dirty money was laundered in London, UK overseas territories and crown dependencies, while the National Crime Agency estimated that as much as £90bn was laundered annually in the UK.

“This is happening, in part, because the government has stopped prosecuting its own laws. Money laundering prosecutions cratered 44% between 2011 and 2023, while convictions plummeted by 42%,” he said.

Mr Lammy accused the Conservative government of opening the doors to kleptocrats to come to the UK and then offering them professional services, “the finest bankers, lawyers, estate agents and accountants that money could buy in the full knowledge they were being used as corruption services”.

He said Britain’s role as a “corruption services centre” had been raised with him in a visit to Washington DC, as well as in Africa and the Caribbean.

“There have still been zero convictions for sanctions evasion in the UK since 2009. There have still been zero fines issued for breaching financial sanctions put in place since February 2022.

“The UK Office of Financial Sanctions Implementation has only named and shamed one firm for financial sanctions breaches – Wise Payments for allowing the withdrawal of £250 from a bank account. This would be comic if it was not so dire.”

He added that, despite the UK freezing £23bn of sanctioned assets, not a penny had been seized as a result of sanctions evasion enforcement.

Mr Lammy said there were “men in suits behind every crime”. He continued: “Every time a kleptocrat launders money or evades sanctions through British territory, they are enabled by hired help. It’s not just in the mafia movies that the attorney knows where the darkest secrets lie.”

He stressed his own pride in being a lawyer and that “almost all” professionals did “honest work”.

But he went on: “I don’t believe it is right that, despite the mountains of evidence, zero law firms have been prosecuted for criminal breaches of anti-money laundering rules.”

Mr Lammy said Labour’s first step would be to host a summit of “allies and international financial centres to launch a sustained initiative to tackle dirty money”.

This would start by taking “coordinated action against enablers and kleptocrats in partnership with the private sector, and striving to close down the architecture managed by financial centres that facilitates enablers and kleptocrats”.

This would include creating best practice for regulation and supervision on anti-money laundering internationally and corporate transparency for trusts. Harnessing data would ensure effective information sharing: “We will seek to establish a live-streamed global data exchange on beneficial ownership of corporate structures, including trusts and trust-like arrangements to ensure frictionless investigations.”

The summit would also seek action plans to co-ordinate national security strategies “to end the regulatory and enforcement asymmetries through which illicit finance creeps”, and push for the creation of an international anti-corruption court to prosecute “the most egregious acts of international corruption”.

Alongside this would be domestic action, “leading a crackdown on enablers by ensuring the UK’s sanctions regime across all thematic and country regimes consistently and specifically targets professional enablers”.

Further, there would be a new whistleblower reward scheme and an end to UK trusts being used for illicit activity through widening registration requirements.

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