Despite early successes, little is known about the National Economic Crime Center, a public-private partnership that began operations one year ago with the task of overseeing British law enforcement’s overall response to large-scale money laundering, fraud and other financial crimes.
The NECC’s most high-profile action to date came in February, when investigators from a range of government agencies worked through the unit to secure freezing orders against nearly 100 bank accounts that were allegedly used to launder millions of pounds for criminal syndicates.
Speaking on condition of anonymity, officials with NECC’s asset denial and operations branches shed more light on the unit’s mission and encouragement of new approaches against financial crime with ACAMS moneylaundering.com senior reporter Koos Couvée.
An edited transcript of their conversation follows.
One year since its creation, there is still some confusion around the purpose of the NECC and its role in tackling financial crime in the U.K. Can you explain?
Official 1: The NECC has three threat leads: money laundering—and that includes bribery and corruption—fraud, and asset denial. And when we’re talking about threat leadership, we’re talking about tackling serious organized economic crime—the high-end economic crime threat.
It’s the role of the threat leads to identify a very broad threat, say, money laundering, and to decide what we are going to prioritize, while looking at the picture through a multi-agency lens. That could mean prioritizing the key-enabling factors, i.e. professionals facilitating criminality knowingly or otherwise, or it could mean tackling cash-based money laundering, for example.
It’s about agreeing on a strategic position and saying: ‘Money laundering is vast, here’s where we are going to focus our collective assets and here’s what the NECC partners are going to do to respond to the threat.’
Official 2: The NECC doesn’t have a dedicated intelligence or investigative function—its role is one of leadership and coordination. It’s an umbrella organization trying to get the economic crime community—which includes any public or private body—to understand the threat and to work together more effectively.
You also have a broader, more public-facing role.
Official 2: One of the things we’re seeking to do is to act as a single voice for the economic crime community, a go-between for the U.K. law enforcement community, the private sector, and the government.
People often think of fraud and other threats as warranting a traditional law enforcement response, like arrests and prosecutions, but they absolutely invite a non-traditional response as well.
So the whole purpose of the NECC is to break out of that box and start pulling various partners together to formulate a more systemic response. Part of our job involves representing to policymakers and parliamentarians what we believe should be done to tackle economic crime at a systemic level, in tune with the private sector.
How does the NECC coordinate operations?
Official 2: First, the NECC’s operational planning, coordination and delivery team takes a case referral from law enforcement or the private sector, assesses whether it’s genuinely a case of serious and organized crime, whether it genuinely demands a multi-agency response at the national level, and whether a criminal justice outcome can be realistically achieved.
We then decide what we might develop that into in terms of tasking proposals. It’s up to my team to put together proposals as to which agency is going to do what, when and how, and using what resources. Then we have to get it agreed and ensure it is delivered.
All that comes with challenges, because you’re brokering agreement about the allocation of resources across a wide variety of organizations that have different priorities and caseloads and whose statutory remits are really quite different but also overlap. Our job is to find that sweet spot where we can find agreement as to how we’re going to respond to a particular tactical threat.
The best known NECC-coordinated operation to date is Operation Princekin, which led investigators to freeze 95 bank accounts of suspected money mules in a single day. What went on behind the scenes in that case?
Official 1: This was a result of information coming into one of the agencies, in this case the NCA [National Crime Agency], from the private sector on third-party cash deposits into mainstream bank accounts. This appeared to be a systemic issue, so the NECC drew up a plan for what could be done collectively to tackle it.
We decided in this instance to use the relatively new power of account freezing orders under the Criminal Finances Act to halt the activity. Packages were then sent out to the relevant law enforcement agencies, including regional organized crime units, local policing, City of London Police, NCA and so on.
The case showed the NECC’s two-track approach. The first track involves identifying the criminality and getting the money back. The second involves using the data gleaned during that process to better understand the threat, then apprising our financial-sector partners on the risk so they can put protective measures in place. It’s probably fair to say that Princekin has led some of our banking partners to think more about the risks associated with third-party cash deposits.
The NECC is also involved in is the Financial Conduct Authority/Serious Fraud Office investigation into London Capital and Finance, a suspected Ponzi scheme. What is the NECC’s role in that operation?
Official 2: This is a case in which thousands of victims are believed to have lost an estimated total of at least £224 million. It’s a very significant SFO/FCA–led fraud investigation that we got off the ground.
In this case SFO said they needed to undertake operational activity but don’t have the remit to make arrests and execute search warrants, so the NCA and City of London Police were able to help out at short notice to support its work.
Could it have happened without the NECC? Possibly, but the process would have been a lot slower.
The NECC has been described as a public-private partnership. What role do financial institutions play in that partnership?
Official 2: At the moment, we primarily engage with the private sector through the JMLIT [Joint Money-Laundering Intelligence Task Force]. That’s quite deliberate, because we want to ensure that we engage with financial institutions as efficiently as possible.
Official 1: The banks’ role often revolves around identifying a potential risk in the first place, then assessing what level of risk that the methodology, the [criminal] modus operandi, might be. Banks also have a clear role to play in the public-private assessment of the U.K.’s economic crime threat that’s being drawn up at the moment.
How does the NECC promote the use of asset denial powers, in particular new powers such as account freezing orders and unexplained wealth orders?
Official 1: We’re still in the early phases. Mainstreaming the use of proactive asset denial powers by agencies and police forces across the country is a key mission of the NECC as a whole, and we’re still in the early phases—mapping out the capabilities and capacities across the U.K. law enforcement landscape to identify what assets, resources and specialisms the various agencies have in place for using these powers.
Account freezing orders are being used to a greater degree but there’s still more we collectively could and should be doing. That requires resources that are not always in place. Unexplained wealth orders occur less frequently due to the specific nature of their use as an investigative tool. It won’t only be the NCA using them in the future.
Contact Koos Couvée at firstname.lastname@example.org
|Topics :||Anti-money laundering , Counterterrorist Financing|
|Document Date:||November 4, 2019|