According to the study by Transparency International UK (TI-UK) , the current system, which involves 22 different organisations across a range of sectors having some degree of responsibility for supervising and enforcing the AML regulations, allows billions of corrupt funds to seep into the UK every year.
“Given that the Prime Minister has rightly said that dirty cash is not welcome in the UK, it is appalling that a shambolic system is failing to stop that flow,” said Rachel Davies, senior advocacy manager at TI-UK.
“Corrupt individuals are still finding the UK to be a safe haven for their ill-gotten gains and the vast majority of institutions that are meant to prevent that from happening are not up to the job.
“The average house price in central London is more than the total amount of fines dished out to those who laundered money through property last year.”
In 2014/15, HM Revenue and Customs (HMRC) dished out fines totalling only £768,000, an average of just over £1,100 per penalty issued, to those across all of the seven sectors it supervises.
In light of the report, TI-UK would like to see the government consider setting up one single supervisory body to protect against money laundering to replace the current system.
Davies added: “If the UK wants to permanently shut the door on dirty money, there must be a serious change in this flawed system.”
A Treasury spokesperson said: “The government has been absolutely clear that in order to protect the integrity and stability of this world leading financial system, we need an effective anti-money laundering and counter terrorist finance regime.”