Financial services has ‘responsibility’ to fight illicit behaviour

Financial services providers have an important role to play in the fight against illicit finance, a leading British diplomat has said.

British high commissioner to Cyprus Stephen Lillie has urged the UK and Cyprus financial sectors to strengthen their partnership to tackle the issue head on.

Speaking at a conference on combating illicit finance in Nicosia this week co-organised by the British High Commission and the Institute of Certified Public Accounts of Cyprus, Lillie called for a multi-agency approach.

International cooperation is “necessary” to tackle serious and complex tax fraud, transnational organised crime and money laundering, he said.

Lillie told delegates that the government, law enforcement organisations, regulatory bodies and the private sector should all work together.

He highlighted that financial service providers must also be responsible for the challenge of ensuring a “robust financial system”.

“They are the people on the frontline in the fight against illegal activity in the financial sector,” he said.

Lillie added: “Illicit finance is a global phenomenon. It does not respect borders. It undermines our collective prosperity, security and the rules based international system. The IMF estimates that money laundering globally represents between 2 and 5 per cent of GDP.

“It allows criminals to hide the proceeds of illegal activities and undermines the integrity and stability of our financial markets and institutions. We know that there is a marked overlap between money laundering and terrorist financing, which is precisely why our Financial Action Task Force seeks to tackle the two in parallel.”

He suggested that while new technologies create the ability to “unlock untapped wealth and potential”, they can also introduce new ways of facilitating illicit financing.

“Against this background, it’s essential that our efforts to ensure the reduction of illicit financial flows are proactive and have global reach,” said Lillie.

And he argued that the UK is at the “forefront” of these international efforts, adding “we have to be”.

“The UK has one of the world’s largest and most open economies, and London is one of the world’s most attractive destinations for overseas investors. These factors make the UK attractive for legitimate business, but also expose the UK to money laundering risk.”

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