UK National Crime Agency Reveals True Extent Of Professional Crime
The National Crime Agency (NCA) is a national law enforcement agency in the United Kingdom. It was established in 2013 as a non-ministerial government department, replacing the Serious Organised Crime Agency and absorbing the formerly separate Child Exploitation and Online Protection Command, or CEOP as one of its commands. It also assumed a number of responsibilities of other law enforcement agencies.
It is the UK’s lead agency against organised crime; human, weapon and drug trafficking; cyber crime; and economic crime that goes across regional and international borders. The NCA has a strategic role in which it looks at the bigger picture across the UK, analysing how criminals are operating and how they can be disrupted.
To do this it works closely with regional organised crime units (ROCUs), the Serious Fraud Office, as well as individual police forces. It is the UK point of contact for foreign agencies such as Interpol, Europol and other international law enforcement agencies.
The NCA releases hard data that it categorises as; money laundering, fraud, other economic crime, bribery, corruption and sanctions abuse in an annual report.
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It defines the corrupt professional enablers such as legal, accounting and trust and company services professionals who facilitate a range of criminal activity. They have concluded that offshore Shell companies are used extensively to provide anonymity to criminals engaged in money laundering through capital markets and some trade based methodologies. This much is not news.
And, does it come as any surprise that corrupt individuals working in banks, law and accountancy firms are considered to be key enablers to fraud, market abuse and money laundering.
Banks, of course, have cornered the market in money laundering. Bank accounts are a necessity across a range of criminality, with money mule networks widely used to launder funds.
One downside to being a member of the EU is that the EU Payment Account Directive was implemented in the UK on 18th September 2016 and enables the opening of accounts without UK residency. There is a realistic possibility that this will increase the number of mule accounts being set up in future. With Brexit, it is highly likely that this type of crime will increase as banks look further afield in search of more profit.
Transparency International reports that once illicit wealth has been laundered, the UK in particular offers a range of opportunities for corrupt individuals to enjoy it: high-end property, sports clubs, legitimate businesses, residency visas, expensive cars, yachts, jewellery and art can all be purchased without detection. At the moment the UK is recovering just a fraction of the corrupt wealth moving through its economy.
With the help of defamation lawyers and public relations experts, corrupt individuals can start their life afresh and hide their past crimes. With the help of the UK’s exclusive educational institutions, they can embed their children in society’s élite and mix in the right social groups, gaining valuable access and influence.
However, the basic conclusions of the agency recently was more shocking than previously reported by any other government or crime agency before it.
The National Crime Agency has now concluded that previous estimates at £90 billion a year being illegally laundered is a ‘significant under-estimate’. And by significant, the NCA means this number is actually close to £200 billion.
In addition, the NCA also concludes that UK residents are now more likely to be a victim of fraud than any other crime. Typically, the use of malware and phishing emails to obtain individuals details is a key driver of fraud. The data collected can then be used to commit fraud directly, or to add authenticity to another type of crime, such as money laundering.
The report also highlights the fact that Britain, in particular, is an attractive destination for what are termed politically exposed persons (PEPs). This is because “business individuals operating as high end intermediaries use their network of companies and access to financial markets to channel funds and commodities linked to sanction breaches.” In other words, they go to the banks in the City of London who provide an arsenal of tools to break the law.
The shocking conclusion to the National Crime Agency report is that nearly 12 percent of all money in the £2.6 trillion economy of Britain is derived from crime. This is an admission that has never been made public before.
Although the NCA also makes note of new payment technologies such as cryptocurrencies being used, the use of eBay and Amazon is another route of financial crime.
Just last week, The Guardian newspaper reported that Amazon and eBay have been accused by MPs of profiting from VAT evasion at the expense of taxpayers and UK businesses.
Executives representing the e-commerce groups were told that their firms were “turning a blind eye” as organised criminals in the UK and China handle undervalued or misclassified goods for the British market.
In April the National Audit Office disclosed that failure to declare tax from online retailers outside the EU lost HM Revenue & Customs up to £1.5bn. That figure, as most figures from government agencies is usually ‘fudged’ to deflect embarrassment from the true scale of taxpayer losses.
Online sales accounted for 14.5% or £130 billion of all UK retail sales in 2016, making the UK the biggest online market in Europe, so the £1.5bn tax loss is likely falling well short of actual losses to the treasury.
To prove the point, HMRC issued a press release last October stating that “The UK tax gap fell in 2014 to 2015 to its lowest-ever level of 6.5%.” This loss still represents £36 billion HMRC have failed to collect though. However, tax experts have roundly condemned that press release and warned that HM Revenue & Customs was deliberately underestimating the size of Britain’s tax avoidance problem after failing to include controversial structures used by multinationals such as Google, Apple and Starbucks – that HMRC agree deals with.
Also, don’t forget that the term ‘tax-gap’ is a misrepresentation in itself. The “tax gap” is the shortfall between the amount of tax the Treasury expects to get in that year and the sums it actually receives. It is not the actual gap between what is due and what is received.
A year ago, the Organisation for Economic Cooperation and Development (OECD) said, based on extremely conservative estimates, profit-shifting by multinationals was costing governments between $100bn and $240bn(£65bn to £160bn) a year in lost corporation tax – equivalent to between 4% and 10% of global corporation tax revenues.
In the meantime, work by the tax campaigner Richard Murphy, has suggested the tax-gap figure could have reached as much as £119bn, taking into account estimates of tax avoidance by multinationals.
Add all the money laundering, where a considerable amount of tax would have been due if generated legally, to all the tax extracted by evasion strategies and the actual amount exceeds £200 billion a year. Considering that total government spending in 2016 was £588 billion, the scale of fraud, money laundering and tax evasion is creating huge problems for civil society plagued by the ideology of austerity, an ideology that gives cover to criminality.
Part of that austerity drive was to cut the police budget overall by 18 percent and sack over 20,000 police officers. When Theresa May made this decision, she did so (wrongly) thinking that crime was going down, just at the time when online crime, fraud and money laundering have reached new highs every year.