Blair cracks down on 'terrorist funding'
Prime Minister Tony Blair, announcing a new financial crackdown on terrorism, said action would be taken to prevent billions of pounds a year of illegal funds being ‘‘laundered’’ through bureaux de change.
The bureaux currently fall outside the financial regulatory system and can easily be exploited by terrorists and other criminals seeking to launder money.
Government sources estimate that up to £4bn-a-year leaves the country through bureaux de change and that 65% comes from illegal sources. Only 8% is for legitimate holiday travel.
Financial regulators are to be given powers of inspection and it will be an offence for high street banks to deal with unlicensed bureaux de change.
The then Home Secretary Jack Straw said shortly before the last election that bureaux de change and money transmission agents would be regulated as part of a crackdown against organised crime.
He said there was clear evidence that some bureaux had become significantly involved in money laundering.
A ‘light touch’ regulatory regime would require bureaux to register details of ownership and agree to a new code of practice. Failure to comply would lead to fines or closure.
Britain is the only European Union country that does not regulate the sector and there is evidence that large amounts of money are laundered every year.
Research found that one outlet was used to launder £70m of criminal proceeds between 1994 and 1996.
In the Netherlands, where similar regulations were introduced a few years ago, two thirds of bureaux decided to close rather than register.
Investigators have found that in some cases bureaux de change do not know they are being used for money laundering.
The terror atrocities have added impetus to the desire to crack down on businesses which enable money launderers to sidestep bank controls with alternative ways of moving cash.
A Customs spokesman said tonight: ‘‘Our own experience does tell us that bureaux de change are used to launder money, and in the last few years we prosecuted more than 25 cases of money laundering which have involved passing money through bureaux de change.
‘‘We would welcome any proposals that would mean the tightening up of regulations for bureaux de change.’’
