Identifying Money Laundering Risk in the United Kingdom: Observations from National Risk Assessments and a Proposed Alternative Methodology.
journal contributionposted on 21.05.2018, 14:14 by Matt Hopkins, Nikki Shelton
Two National Risk Assessments (NRA) of money laundering have now been published in the United Kingdom (see HM Treasury 2015 and 2017). While both represent an attempt to identify the risks of money laundering, there are limitations in relation to the conceptual framework and the methodology used. This paper reviews the UK NRAs and considers whether revision of the methodology employed could help to both remedy these limitations and generate more robust findings. Drawing upon the findings of the UK strand of project IARM, it outlines how a composite money laundering (ML) risk indicator was developed through analysis of threats and vulnerabilities across 43 police areas. The findings demonstrate that risks are highest in the City of London and the Metropolitan police area, which is largely explained by the presence of organised crime groups, connections to risky jurisdictions and the cash intensity of businesses. Although the findings should be treated with caution, it is posited that this methodology could be used to help future NRAs develop a more robust framework to understand ML risk and ultimately develop more effective preventative strategies.