Research identifies anti-money laundering hotspots

Northern Ireland has been named as a potential hotspot for money laundering.

New data from anti-money laundering software provider SmartSearch has identified the country as the UK’s most vulnerable area for dirty money.

A poll among 500 AML regulated UK businesses across the legal, finance and property sectors – including agents - found 71% of respondents in Northern Ireland had not changed their approach to onboarding new customers since sanctions were imposed on Russia after its invasion of Ukraine.

It also found that 85% had not changed their approach to monitoring existing clients since the start of the war.

A report this year by the commons foreign affairs committee revealed that the government was still failing to tackle Russian kleptocrats who were laundering cash illegally through the UK – claiming that some of it was being used to finance Putin’s invasion.

Since the incursion, an unprecedented 7,200 individuals and 1,250 entities have been added to the thousands of sanctions already affecting Russia since the war in Ukraine began.

Other regions most vulnerable to money-laundering included the South West and the West Midlands, where 58% of the regulated firms who responded had not increased their checks.

Wales was revealed as the part of the UK most likely to stop Russians laundering dirty money, where 72% of regulated firms in the country had increased checks on clients since the war began. 

Firms in London and Yorkshire were almost as vigilant, with 63% upping their checks on new customers since the start of the war.

SmartSearch managing director Martin Cheek said: “These shortfallings are a far cry from proper due diligence and it’s no wonder that criminals and kleptocrats are taking advantage of these loopholes to wash their money in the UK.

“Electronic verification (EV) is the only robust way to monitor new and existing clients – it can even retro-screen them. It is the most effective way for firms to show they have sought to avoid sanction breaches and the fines and reputational damage which come with them.”