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The release of the FinCen files could not have come at a worse time and may affect long-term relationships and Brexit negotiations

Plans to to clamp down on fraud and money laundering will go some way towards strengthening controls, says Sunil Bhavnani.

The UK’s plans to reform the register of company information to clamp down on fraud and money laundering following the release of the FinCen files will go some way towards strengthening controls, but a further tightening of the regulatory environment must follow, says Sunil Bhavnani.

The revelations regarding the reports made by certain banks such as HSBC and Standard Chartered could not have come at a worse time for the UK and the economy.

The FinCEN files show that over 3000 UK companies were cited on the suspicious activity reports as being potentially involved in money laundering activities – this is more than any other country. The perception is that the UK is higher risk due to weaker controls and this may have consequences for the UK’s longer-term relationships with other countries.

The UK is in the middle of negotiations with the EU to map out what the future of its trading relationship will be, and progress to date indicates that there is a genuine risk of a no-deal Brexit. The overspill of the Brexit arguments and implications on the Good Friday agreement could have a significant impact on the UK’s ability to agree a trade deal with the US, the timing of discussions themselves complicated by the US election in November. At a time of significant economic uncertainty caused by the Coronavirus pandemic, it is imperative that the UK continues to be an attractive place for business, but with regulatory integrity to satisfy the needs of overseas trade partners.

A further tightening of the regulatory environment must happen if the UK is to ensure greater assurance can be obtained on the source of funds and the identity of beneficial owners. Such changes increase the administrative burden on UK businesses, their advisors and owners, and so investment in technological solutions with greater oversight and transparency of information is crucial to alleviating this.

Would you like to know more?

If you would like to discuss any of the above guidance, please contact Sunil Bhavnani or your usual Blick Rothenberg contact.

For any press queries, please contact David Barzilay whose details are to the right.