Deficiencies in Corporate Anti-Money Laundering in the United Kingdom After Brexit and Suggestions for Change

Abstract

The law on money laundering should be an essential aspect of any country's legal system. Through its six anti-money laundering directives, the European Union has provided a fairly robust system for its members to reduce the crime of money laundering while ensuring a Union-wide cooperation on the issue. However, upon a country’s leaving the European Union, it is no longer bound by its rules, creating limited circumstances. Consequently, the United Kingdom left the European Union after Brexit, and its government decided that it would not adopt the Sixth Anti-Money Laundering Directive, since it felt that its laws were effective enough to deal with corporate money laundering. However, analysis shows that the United Kingdom has systemic limitations regarding money laundering, that provide it with a well-earned reputation as the central money laundering country in the developed world. These limitations are diverse in their scope and range from the lack of a realistic enforcement mechanism regarding the attribution of money laundering to legal persons, to allowing questionable people to form companies and launder money through them in the United Kingdom. The question of failure to prevent money laundering from being a corporate money laundering offence also presents a significant problem in this case. Even though used rarely, the deferred prosecution agreements in the United Kingdom offer companies an opportunity and to fight against money laundering in the United Kingdom. The United Kingdom is responsible for reforming these legal issues to ensure that the country is not a haven for money laundering. This paper will use a literature review of the existing material on the subject, legal and policy review of the existing policy, and a regulatory framework to explore this issue.