Economic Crime Plan 2: “I love it when a plan comes together” - How the ABI is helping to ensure the success of the UK Economic Crime Plan 2.
We recently welcomed the publication of the second iteration of the UK Economic Crime Plan (ECP2).
First published in 2019, the Economic Crime Plan aimed to promote better cooperation between the government, law enforcement and business through improved information sharing, resource pooling and technological innovation. Its key successes, which we played an important part in helping the government achieve, included undertaking a review of the UK’s Money Laundering Regulations and the introduction of key legislation such as the Online Safety Bill and Economic Crime and Corporate Transparency Bill.
Improving the Economic Crime Landscape: ECP2's Aims and Reforms
ECP2 seeks to build on these successes by setting out the government’s ambitious strategy to meet the continued challenges presented by economic crime. It’s three main aims are to:
- Reduce money laundering and recover more criminal assets
- Combat corrupt elites and drive down sanctions evasion
- Cut fraud
The Plan also contains several reforms aimed at delivering improvements across the whole economic crime ecosystem, including improving information and data sharing, increasing law enforcement capacity and ensuring ongoing sustainable funding for tackling economic crime.
We have been closely involved in the development of ECP2 to ensure it has benefits across all sectors. We’ve represented the insurance and long-term savings industry on key governance and oversight groups including the Economic Crime Strategic Board and the Public-Private Steering Group. Through this we helped develop the key outputs and performance indicators which will help measure progress in implementing the Plan.
Effective Oversight and Impact: Our Role in Monitoring and Strengthening the UK Economic Crime Plan (ECP2)
Now that the Plan has been published, we’re working to make sure that the Plan is monitored effectively. Our priority is to ensure there is proper oversight, transparency and control of spending so that a full assessment can be made of its effectiveness and impact on the economic crime landscape. This is important, not least because ECP2 is underpinned by a long-term investment of £400m, comprising both government and private sector funding (to be collected through the Economic Crime Levy which many in the long-term savings sector will contribute to).
Combatting fraud is a key pillar of ECP2. As a key government partner in tackling fraud, we’ve engaged with the Home Office and the Joint Fraud Taskforce on the development of the UK’s Fraud Strategy, the publication of which we welcomed earlier this month. The Strategy will underpin ECP2 and aims to cut fraud by 10%. As my colleague Mark Allen explained last year, we’re working with the Home Office on the development of an Insurance Sector Fraud Charter which will comprise a series of insurance sector and public sector commitments to make the UK more resilient to insurance fraud. To ensure the momentum generated by the publication of ECP2 and the Fraud Strategy is not lost, it’s imperative that these sector charters are prioritised.
Another strand of ECP2 focuses on strengthening the current anti-money laundering regime, including improving the effectiveness of Money Laundering Regulations. We’ve made clear to government that the UK must maintain a proportionate, joined-up and strategic approach to the prevention of money laundering. There is an opportunity for the UK to place more onus in a post-Brexit environment upon aligning the UK regulatory landscape to the specific threats faced by the UK, rather than using EU legislative reform as a blueprint for UK reform.
ECP2 commits to introducing a ‘failure to prevent’ fraud offence. While we believe that regulation of the financial services sector already provides a good benchmark for disincentivising corporate misconduct, we would not be opposed to a new offence if certain measures are in place, not least to ensure there is sufficient time to allow firms to amend systems and controls. The government’s intention is to apply the new offence to larger organisations only, although the government retains the power to amend the size thresholds via secondary legislation. We’re therefore urging the government to monitor the position regarding smaller enterprises closely and, if necessary, bring them within scope of the new offence.
While ECP2 is a landmark in the fight against economic crime, it will continue to present a serious and complex threat to the UK’s prosperity and security. To ensure the Plan does indeed ‘come together’ successfully, we are fully committed to continuing to work in partnership with government to design and build an outcomes-focused response where resource is targeted towards tackling the most significant harms and the impact of the reforms is closely monitored.