Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by the Building Societies Association


  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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