APPENDIX 12
Memorandum submitted by the Building Societies
Association
CORRUPTION INQUIRY:
MONEY LAUNDERING
On 22 November 2000 the Financial Times carried
an article headed "Finance sector hinders crime fight",
which suggested that the combating of money laundering was being
hindered by failure of most financial organisations to report
suspicious transactions to the National Criminal Intelligence
Service.
A number of statistics were quoted including,
for example, the only one in four of the UK's 554 authorised banks
had submitted a report last year, that reports were submitted
by only 33 of the 840 insurance companies, and that 57 of 12,500
solicitors has submitted reports, The Association first became
aware of these statistics from the Cabinet Office Report, Recovering
the Proceeds of Crime (June 2000).
The reason I am writing to you now is to point
out that a further statistic, the one relating to reporting of
suspicions by building societies, was omitted from the Financial
Times report. By far the highest proportion of organisations
disclosing suspicion reports to NCIS in 1999 was in the building
society sector (76.8per cent-53 out of 69). This does not indicate
that building societies are particularly being targeted by money
launderers but rather it shows that the building society sector
takes its responsibilities in relation to money laundering prevention
very seriously. It should be borne in mind that a number of societies
are very small businesses (some have only one branch) and it is
quote possible that, even during the course of a year they would
not deal with a suspicious transaction. Taking this into account,
it is clear that the response by the building society sector is
an extremely strong one, both in its own right and in comparison
with other financial service sectors.
No doubt NCIS has provided you with these statistics
relating to building societies, but in the light of the Financial
Times article I thought it appropriate to write to you to
complete the picture.
Chris Lawrenson
Head of Services, Building Societies Association
December 2000
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