The government is calling on Britain’s banks and law firms to share success stories about blocking dirty money, as ministers scramble to demonstrate that London’s financial sector has cleaned up its act ahead of a pivotal global assessment of UK anti-money laundering controls.
The Treasury has issued a formal call for evidence asking City firms to provide real-life examples of how they have refused or terminated relationships with high-risk clients since 2022. The exercise is designed to build a compelling portfolio of case studies to present to the Financial Action Task Force (FATF) ahead of its comprehensive on-site review of the UK next summer.
The FATF Challenge
The international crime watchdog’s last assessment of Britain in 2018 proved damning. That report fuelled accusations that London had become a safe haven for illicit finance, with critics pointing to the capital’s attracts for kleptocrats and criminal networks seeking to launder proceeds through legitimate financial channels.
Now, with the next mutual evaluation scheduled for 2027, the pressure is mounting on the UK’s anti-money laundering regime to prove it has meaningfully improved. Moody’s Investors Service warned earlier this year that FATF examiners will want hard evidence of progress.
“When FATF examiners arrive in the UK, they may ask how much of that risk is really being reduced by the UK’s controls, intelligence and enforcement, and how quickly,” the rating agency noted.
A £100bn Problem
The scale of the challenge is staggering. The National Crime Agency estimates that approximately £100bn is laundered through or within the United Kingdom each year. City firms—including banks, solicitors, and accountants—continue to provide services that, whether wittingly or not, facilitate fraudsters, human traffickers, drug dealers, and other organised crime groups.
Successive national risk assessments have flagged the legal sector as presenting “high risk” for money laundering since 2017. Despite billions spent annually on supervision and enforcement, with hundreds of firms denied entry to the financial system following due diligence checks, the vast sums flowing through the UK suggest existing measures remain insufficient.
The government insists it has strengthened its response. A Treasury spokesperson said: “We take firm and coordinated action across government and industry to crack down on economic crime. We have introduced new strategies, enhanced enforcement capabilities and increased funding designed to disrupt those seeking to abuse the UK economy.”
What the Treasury Wants
The call for evidence, submitted before October’s deadline, requests that firms detail cases where their intervention led to state investigations or prosecutions. The government is specifically asking for examples of how red flags in customer profiles prompted changes to client acceptance policies.
To build the strongest possible case, officials want concrete examples demonstrating how UK anti-money laundering, counter-terrorist financing, and sanctions frameworks work in practice. The evidence will form the backbone of the UK’s submission to FATF before inspectors arrive on British soil.
New Threats on the Horizon
Beyond proving progress on existing vulnerabilities, the UK must also demonstrate it can respond to emerging risks. The Treasury has identified AI-fuelled investment fraud and the growing use of cryptocurrencies as areas requiring heightened vigilance. These technologies can obscure transaction origins and create new vectors for criminal exploitation.
Moody’s noted that while billions are spent each year on compliance and supervision, the persistent scale of laundering suggests the cat-and-mouse game between financial institutions and criminal networks continues to favour those operating in the shadows.
Why it Matters
The FATF assessment carries significant consequences for London’s global standing as a financial centre. A poor result could damage the UK’s reputation, deter legitimate international investment, and hand ammunition to critics who argue Britain remains too permissive with suspect capital. Conversely, a credible showing would validate years of reform efforts and reinforce the City’s position as a trustworthy hub for global capital. With £100bn cycling through the UK economy annually, the stakes extend far beyond regulatory box-ticking—they touch on the integrity of the entire British financial ecosystem.