Lawyer Monthly Magazine - April 2019 Edition

32 BREXIT www. lawyer-monthly .com APR 2019 Aziz Rahman of business crime solicitors Rahman Ravelli examines theworryingmoney laundering implications for the UK when Brexit becomes a reality. B R E X I T WI L L BREX I T SEE A R I SE I N MONEY LAUNDER I NG? Among the political turmoil over Brexit and the UK’s future relationship with Europe, the issue of money laundering seems to have been overlooked so far. And that would be a big mistake. There can be no conclusive estimates of the scale of money laundering in Europe. But we are talking about many billions a year. Many commentators would say the EU has been far from perfect when it comes to tackling money laundering. But it has at least introduced a series of money laundering directives in recent years that aim to stop the proceeds of crime flowing into its member states. The most recent one, the Fifth Money Laundering Directive (5MLD), is set for implementation in 2020. Following on from the Fourth Money Laundering Directive, which ordered major changes to how businesses should take a risk- based approach to money laundering and removed automatic exemptions from due diligence, 5MLD will regulate virtual currencies, improve precautions for transactions involving high- risk countries and enhance the centralisation of bank data in member states. In short, it is a further removal of weaknesses that allow money laundering to flourish. Membership of the EU has been no guarantee of protection against laundering, especially as some of its smaller members lack either the expertise or the resources to tackle it - as has been shown in a number of financial scandals in recent years. Such problems have led to louder calls for an EU- wide organisation to see greater consistency between member states’ identification and prevention of laundering. Yet now such arguments are now overshadowed by Brexit. Whether the EU states come to miss the UK’s expertise in identifying sources of illegal wealth and its movement around Europe and the rest of the world remains to be seen. “Membership of the EU has been no guarantee of protection against laundering, especially as some of its smaller members lack either the expertise or the resources to tackle it”