Scotland convicts far fewer people under money-laundering laws than the rest of the UK, according to a major new global report.
International researchers – in a broadly positive report on Britain’s efforts to tackle dirty money -said prosecutions were “notably lower” north of the border than south.
Experts at Financial Action Task Force or FATF – a body set up by the G7 group of advanced economies to tackle serious global criminality – said there had been a dozen specific money-laundering convictions in Scotland in 2016 compared with nearly 2000 in England and 58 in Northern Ireland.
Justice insiders in Scotland are not convinced this FATF comparison is fair – because Scottish prosecutors have other options for charging launderers and because they face a higher evidentiary bar, with the requirement for corroboration.
However, they acknowledge there is still more Scottish authorities can do to root out those trying to clean the proceeds of their crimes in this country.
FATF said: “The UK routinely and aggressively identifies, pursues and prioritises money-laundering.
“Annually, the UK achieves around 7 900 investigations, 2 000 prosecutions and 1 400 convictions for cases of standalone ML or where ML was the primary offence.
“Prosecution and conviction figures are notably lower in Scotland. This may be due to Scotland’s higher evidentiary threshold.”
Scotland has had some big successes against money-launderers in recent years. Last week a gang of four Latvians were jailed for 20 years for money-laundering and fraud. The group, including Hardijs Langsteins, had trafficked vulnerable people from the Baltic nation, put them up in West Lothian and forced them to open bank accounts. However, they were convicted of catch-all Scottish organised crime offences and would not necessarily have shown up in statistical analysis off the kind carried out by FATF.
An official Crown Office and Procurator Fiscal Service (COPFS) spokesman said: “The FATF report notes that despite the higher evidential standards required in Scotland, the Crown Office and Procurator Fiscal Service has had a number of notable successes in the prosecution of money laundering.
“In Scotland, money laundering can also be prosecuted as a different statutory offence, namely being involved in serious and organised crime, and also via common law in terms of the Scottish crime of reset or as part of other criminal charges.
“A number of steps have already been taken to enhance COPFS’ capability to prosecute these crimes and COPFS will continue to develop training and tools and collaborate with law enforcement partners to effectively prosecute such cases.
“In addition, the Lord Advocate has secured additional funding for the COPFS Serious and Organised Crime Unit and this will help build capacity in Scotland to investigate and prosecute such cases.”
Scotland has been praised internationally for audacious efforts to target and disrupt high-level gangsters, both by the Crime and Police Scotland. Sources believe many of the English money-laundering charges are for low-level figures, “tiddlers”, or “mules”. These include as students duped by criminals in to earning “easy money” by letting dirty money cleaners flush transfers through their accounts.
FAFT mentioned the Scottish Crime Campus at Gartcosh where multiple UK and Scottish agencies came together to prioritise significant players and their laundering networks.
The global researchers stress that challenges are rising with Scottish figures showing a more than 58 per cent rise in red flags for potential laundering – suspicious activity reported between 2013-2017.
FATF also said that Police Scotland accounted for four of the 180 serious money-laundering investigations under way across the UK.
Ben Wallace, the UK minister for Security and Economic Crime said he was delighted with the reports findings.
He said: “The UK has taken a leading role in the global fight against illicit finance.
“We will use all the powers and tactics we have, as set out in the new Serious and Organised Crime Strategy, to drive money launderers out of the UK and clamp down on those that threaten our security.”
FATF also called for the UK to take further action on the single form of corporate entity that does most to put Scotland in to international laundering headlines: the limited partnership or SLP. Separately, this week it emerged that none of the thousands of SLPs flouting basic transparency rules imposed to end their widespread abuse had been fined. FATF, however, praised Britain’s corporate transparency.
Money-laundering expert Graham Barrow suggested industrial-scale abuse of SLPs and similar English entities suggested all was not as rosy as the FATF suggested.
He said: “The UK gets a mostly clean bill of health from FATF at the same time that 100s of UK entities (mainly LLPs and SLPs) are used in every major laundromat over the last 10 years. Which suggests FATF measures actions not outcomes. Not the same thing!”
Westminster is responsible for corporate law on issues like SLPs and much regulation. Money-laundering enforcement in Scotland is devolved, though HMRC looks at tax cases.
Source : HeraldScotland