The Economic Crime Plan 2 and the Future of Economic Crime in the UK

The Economic Crime Plan 2

The Economic Crime Plan 2 (ECP2) is a new strategy launched by the Home Secretary, Suella Braverman, on Thursday 30th March 2023, after a nine-month delay which sets out what the public and private sectors should do to crack down on kleptocrats, money laundering, sanctions busting, and fraud. The government states that the ECP2 ‘builds on the foundations of its predecessor’ to improve the response to economic crime through enhanced cooperation between government, law enforcement, supervisory agencies, and the private sector. It is projected to recover an additional £1 billion in criminal assets over 10 years and covers the period up until 2026.

The government has committed an extra 475 financial investigators to help manage the problem. These newly hired investigators will work to disrupt money laundering and the criminal use of cryptocurrencies by increasing asset recovery. Several agencies will also join to create a group to identify and seize illicit cryptocurrencies. However, experts at the Royal United Services Institute (RUSI) state this is ‘not enough to turn the tide on decades of underinvestment’. RUSI states that the government still lacks a coherent long-term plan and strategy for removing the assets of sanctions-hit Russians from the UK which has more than simply sanction application.

‘Economic crime harms our economy and destroys lives. More funding from the government and the new contribution from industry through the levy will allow us to deliver a step change in our response’

- Minister Baroness Penn (Treasury Lord)

The National Crime Agency’s Combatting Kleptocracy Cell will target corrupt elites whilst consolidating the effectiveness of UK sanctions against Russia after Russia invaded Ukraine. UK companies can only be held accountable directly for corporate crimes when upper-level management has criminal intent, so the legal bar can be difficult to meet. The government has proposed that passing this new legal legislation could change the application of this doctrine. Cooperation with the private sector is crucial to the success of this plan which has resulted in the development of a new approach to public-private prioritisation which will ultimately maximize the ability to detect economic crime.

Funding for the ECP2

Funding of the 3-year plan is backed by £400 million over the Spending Review Period. This includes a £200 million HMG investment and a £200 million from the Economic Crime (Anti-Money Laundering) Levy raised from the private sector. The funding is said to ensure a step-change in supporting the delivery of critical economic crime reform.

However, MPs, such as Margaret Hodge (Labour MP), chair of the all-party parliamentary group (APPG) on anti-corruption and responsible tax suggest that should this three-year economic crime plan fail to receive adequate funding, it will simply amount to ‘smoke and mirrors’. Hodge states, ‘ as far as we can see, no additional funding has been allocated to the fight against dirty money.’ Indeed, MPs such as Hodge say that the government should be making commitments not through the plan but by introducing measures through the economic crime and corporate transparency bill, now going through the House of Lords.

‘The plan places a welcome focus on the threat that the proceeds of kleptocracy and corruption pose to the UK’s national security interests…however, the actions in the plan are a timid starting point. The response to transnational illicit finance needs to move beyond sanctions into long-term criminal justice responses.’

- Maria Nizzero (research fellow at RUSI)

Indeed, RUSI states that plans to grow a police force to deal with an economical crime are ‘not enough to stem a multi-jurisdictional, multi-billion pound threat’. Experts at RUSI have posed similar concerns about resources as Hodge. Helena Wood, co-head of the UK Economic Crime Programme (ECP) said that the plan aims to improve policing response to economic crime however does little to deal with the fact that economic crime represents only 1% of policing resources. Wood states that the additional 475 staff are not enough to stem any meaningful combat to this threat to the UK’s national security. As economic Crime is an international matter, the government must seek to strike the correct balance between funding, execution, and resources. This requires some future examination of the true effectiveness of this Plan.

Esther Zhang