Most organised criminal activity is directly or indirectly aimed at making money. The ability to launder this money to support their criminal activities and retain their profits is a major concern for all organised crime groups.
Criminal financing can vary across crime types. For example, the supply of drugs involves a segmented, international supply chain with thousands of operators at the lower levels. Cash transactions range from street level deals in small denominations to consolidated high values exported in large denomination notes to pay for further drug consignments.
However, organised immigration crime and fraud depend less on large cash transactions with money flows through the supply chain reflecting the differing structure of criminal activity. Successful criminals in all areas also rely on flows of cash from their criminal activities to fund their lifestyles and invest for the future.
The proceeds of many crimes are usually generated as cash. Hard cash represents a considerable risk to criminals. It increases the possibility of exposure, theft by rival criminals and seizure by law enforcement. Cash is also bulky and cumbersome to handle in large quantities.
Whilst it is difficult to assess the scale of money laundering, it is easier to identify the ways criminal finances are laundered. Techniques range from basic carriage on the person or in transport, channelling through cash-rich businesses and conversion to assets, to complex international structures. When criminal cash enters the legitimate economy it is very vulnerable to identification.
If your business is regulated by the money laundering regulations you must report any suspicious financial activity to the NCA through the Suspicious activity reports system. For more information on SARS visit the the SARs regime page
How money is laundered
To avoid this, criminals take action to prevent this cash from attracting suspicion. For example they may move it to other locations, including abroad. They also use it to buy other assets or try and introduce it into the legitimate economy through businesses with a high cash turnover.
The need to dispose of cash and move money overseas has lead to the concentration of risk in sectors like Money Service Businesses (MSB). The MSB sector provides important services to both people and businesses, but its reputation is tainted by MSBs complicit in money laundering activity. Through project Quaver the NCA is working with the MSB sector, regulators and service providers to identify and exclude criminal money flows from the sector.
A significant amount of the criminal proceeds generated in the UK is laundered overseas, both to hide profits and pay for criminal goods. The United Arab Emirates, the Far East and South East Asia (particularly Hong Kong and Singapore) and Spain are all attractive to money launderers.
Organised criminal groups therefore often utilise specialist money launderers who manage laundering for multiple enterprises active across various illicit activity.
Specialist money launderers
Only a small number of criminal groups specialise as money launderers, compared to the total number of criminals engaged in money laundering activity. The specialist money launderers provide more sophisticated laundering services to other criminals.
However, these specialists are responsible for laundering a significant proportion of all proceeds of crime. Their ability to process more value per transaction increases the likelihood that organised criminals will be interested in using their services. Specialist money launderers will often launder money for several criminal groups and charge commission.
The Economic Crime command leads the NCA's fight against money laundering. Find out more about the Economic Crime Command.