British banks are reportedly testing ways to share data to prevent money laundering and terrorism financing.
Six or more banks are preparing to participate in two pilot programs that may be launched in October if an economic crime and corporate transparency bill becomes law, Reuters reported Wednesday (June 21), citing unnamed sources.
In one pilot, banks would share data if they spot signs of serious financial crimes. In the other, they would launch a broader database to identify economic crimes, according to the report.
The pilots would involve government and law enforcement agencies as well, the report said.
These pilots, and the bill that is currently in Parliament, aim to solve the concerns banks have had about violating data protection and privacy rules when trying to cooperate to counter money laundering and other large-scale financial crimes, per the report.
The new efforts are being driven in part by a desire to enforce sanctions on Russia, counter financial crime that costs the U.K. economy about $450 billion a year and end what some lawmakers have said is the U.K.’s reputation as a destination for dirty money, according to the report.
The U.K. government moved to bolster its ability to track illicit funds and prevent money laundering in February 2022 as countries around the world began sanctioning Russia and its oligarchs.
An Economic Crime (Transparency and Enforcement) Act was passed into law and the Economic Crime and Corporate Transparency Bill was introduced and began making its way through Parliament.
The second bill aims to tackle ways that illegitimate funds are moved through the U.K.’s economy that were not addressed by the new law.
A report released in January 2022 by the anti-graft charity Spotlight on Corruption found that economic crime in the U.K. ends up costing the government “hundreds of times more” than the government spends fighting it.
Spotlight on Corruption found that while the U.K. government spends about $1.1 billion on the budgets every year for national agencies fighting economic crime, the country’s gross domestic product loses about $258 billion to fraud and $135.6 billion to the fight against money laundering.