Economic security of the UK
Economic crime, manifested in various forms - fraud, money laundering, corruption - poses a significant threat to financial systems around the world. In recent years, the widespread use of modern technology and the expansion of global markets have increased the challenges associated with detecting and preventing economic crimes. Traditional approaches to combating financial fraud are proving insufficient in the face of increasingly sophisticated and powerful methods used by criminals. This highlights the need for states to take proactive and cooperative measures, incorporating technological advances, regulatory frameworks and international cooperation, to effectively combat economic crime and preserve financial integrity. One of the countries actively dealing with issues of economic crime is the United Kingdom, which not only seeks to ensure internal security in this area, but also to minimize external risks caused by geopolitical changes.
Economic crime plan
The UK positions itself as one of the leading international financial centers with an open economy and efficient business tools, which, together with global connections and influence, facilitates large-scale foreign trade and investment activity. The Kingdom acquired this status not only due to the volume of economic transactions, but also due to the innovative technologies being introduced, which allow interested parties to become participants in the country’s financial system. At the same time, the UK authorities admit that their system is not the most reliable - the potential annual cost of economic crime is about 8 billion pounds, and crimes such as fraud, money laundering, terrorist financing and corruption are indicated as the main sources of threats to national security .
In connection with this, a three-year Economic crime plan (ECP) was developed in the UK in 2019, however, the activities carried out within the framework of this program were associated not only with a direct impact on problem areas. First of all, the government intended to increase the level of information exchange between the state and private sector organizations, as well as improve legislation and mechanisms for law enforcement agencies for the purpose of early detection and suppression of illegal activities. During the implementation of the strategy, new measures were introduced in the system of combating economic crimes that could have a positive impact on security in the region. For example, a joint working group to investigate money laundering was created based on the National Economic Crime Center and the Serious Economic, Organized and International Crime Directorate based on the Crown Prosecution Service, and mechanisms were developed to give government authorities the right to block the listing procedure for valuable assets. company papers.
The national program also touched upon the technical and technological aspects of ensuring economic security. One of the tools proposed was the use by legal entities of a suspicious activity reporting system aimed at detecting not only economic violations, but also crimes directly affecting the life and health of citizens. Such reports may contain information about bank accounts and other assets of companies and can subsequently be submitted to tax or customs authorities. At the same time, the state partially places responsibility for compliance with regulations in this area on private sector organizations. Thus, it is through the suspicious activity reporting system that companies are obliged to notify law enforcement agencies about possible threats, however, on the other hand, they themselves can commit a crime if they were directly or indirectly aware of the suspicious transactions of their counterparties or employees.
The ECP 2019-2022 also affected the legislative sphere. Despite the existing Proceeds of Crime Act (2002), Terrorism Act (2000), Anti-Terrorism, Crime and Security Act (2001), as well as the Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017), the government needed to improve the effectiveness of law enforcement. Thus, a new fee was introduced from private enterprises - credit institutions, auditing and financial consulting firms, providers of crypto assets, whose income is more than 10.2 million pounds. The fee varies depending on the income of the organizations - from 10,000 to 250,000 pounds. The purpose of this instrument is to increase funds for government initiatives at the expense of the private sector.
An equally important update to the legislative framework is the new Economic Crime (Transparency and Enforcement) Act, 2022. In addition to reforms related to company registration systems and technical solutions to create a register of foreign legal entities and identify their beneficiaries, the regulation contains provisions that could potentially be used against Russia.
New Plan and New Threats
Undoubtedly, the special military operation (SMO) of the Russian Federation that began in 2022 gave impetus to changing the structure of the world economy. As of February 2024, Western countries imposed more than 15 thousand sanctions against Russia and some of its citizens, large enterprises and government agencies, which were aimed at limiting the functioning of the country's economy. However, the sanctions regime not only failed to destroy the economy, but also provoked the strengthening of foreign trade ties of the Russian Federation with countries such as China, the UAE and India, and contributed to the involvement of these countries in the supply chain of resources critical for Russia.
Against this backdrop, the UK's National Crime Agency has issued a warning to financial institutions and other members of the regulated sector that some critical goods may be procured by Russian companies through intermediary countries. If information about the participation of organizations in trade relations with Russia is confirmed, the UK government may impose sanctions on them. In parallel, a new Economic Crime Plan 2023–2026 has begun to be implemented in the United Kingdom. The strategy focused on three main areas: reducing money laundering and increasing asset seizures, reducing fraud, and combating kleptocracy.
This government program is aimed not only at ensuring its own security and the security of its residents, but also at confronting Russia and, in the future, other unfriendly states, thus acquiring a foreign policy character. First of all, this is due to the beginning of the SMO in the Donbass - after the massive introduction of sanctions against Russian businessmen, it was revealed that some of them directly or indirectly freely dispose of assets in the UK and could potentially be involved in criminal activities of money laundering and in activities dangerous for the British states of the supply chain of goods, for example, in the field of high technology or the fuel and energy complex. In addition, based on the activities of Russian entrepreneurs, as well as against the background of Russia’s stable foreign trade turnover, the Plan 2023-2026 provides for the development of measures aimed at combating sanctions evasion. However, it is unknown whether these measures will be applied to the state itself.
According to British media reports, the United Kingdom still purchases Russian oil through third countries. According to UK law, oil that has been refined in other countries does not belong to the country in which it was extracted. Thus, the total cost of oil supplies from Russia to the UK in 2023 amounted to more than 2 billion pounds.
One of the points of the Plan, which is of particular relevance today, is devoted to frozen Russian assets. Since the beginning of the SMO in Ukraine, the total value of Russian blocked funds in Europe has amounted to 260 billion euros, of which, according to some estimates, in the UK - more than 30 billion pounds. According to the program, it is planned to develop a mechanism that will allow the seizure of funds obtained by criminal means or assets belonging to offenders. And since the idea of confiscating Russian assets is often mentioned in the European community throughout the SMO, there are risks that such an legal mechanism could be implemented by the end of 2026.
Taking into account the changing geopolitical situation, the UK government is constantly developing various sets of measures to combat financial crime, aimed at improving technological tools, as well as strengthening interaction between private sector organizations and government agencies. According to the current ECP, along with fraud and money laundering, London identifies Moscow as one of the sources of threats to economic security, and therefore is implementing many measures to curb international trade in the Russian Federation by imposing sanctions. However, the risks associated with the implementation of such government strategies are largely long-term in nature, since the mechanism for the seizure of blocked assets has not yet been worked out. At the same time, in the future, appropriate measures can be used, in addition to Russia, against those countries that interfere with the global interests and policies of the UK.
