Trade-based money laundering (TBML) empowers criminals to run free post-Brexit

Abstract

PurposeThis paper aims to provide unique empirical findings exploring the impact of the UK’s post-Brexit Economic Strategy to boost trade with developing countries on the UK banking sector’s ability to manage trade-based money laundering risks.Design/methodology/approachExploratory research design that used structured literature review, followed by semi-structured interviews with key subject matter experts employed by large UK banks.FindingsBoth banks and law enforcement struggle to prioritise trade-based money laundering (TBML) intelligence discovery due to deficient skills, resources, technology and lack of strong regulatory stimulus. The regulated sector calls for the UK anti-money laundering (AML) reform that would better incentivise TBML deterrence, yet the Government underestimates the money laundering risks while trading with high-risk jurisdictions post-Brexit.Research limitations/implicationsThe findings are based on a small sample of six semi-structured interviews with difficult to access population of key subject matter experts. Despite the small sample, participants provided well-articulated and informed insights.Practical implicationsThe UK’s post-Brexit Economic Strategy to boost trade with developing countries downplays the TBML risks it carries. The findings should alert UK banks, law enforcement and the Government who will collectively bear the responsibility to effectively manage TBML while enabling smooth trading.Originality/valueThe research provides unique perceptions of UK banks’ senior subject matter experts on managing TBML threats from opportunistic criminals.