Recommendations & Conclusions
18 items
2
Conclusion
Eleventh Report - Economic Crime
Accepted
We are as unhappy as the Minister is with progress so far in tackling economic crime, and we welcome his frankness about the progress made. We acknowledge that there is a lot of activity going on across Government, by regulators and crime- fighting agencies, to tackle economic crime; but fraud …
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We are as unhappy as the Minister is with progress so far in tackling economic crime, and we welcome his frankness about the progress made. We acknowledge that there is a lot of activity going on across Government, by regulators and crime- fighting agencies, to tackle economic crime; but fraud and economic crime have continued to rise at an alarming rate. Work being done by Government is still not enough and not urgent enough to stem the rise, let alone start to bring it under control.
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Government response AI summary
The government says it takes the threat of economic crime extremely seriously and has developed robust processes to ensure an effective and coordinated response, including passing the Economic Crime (Transparency and Enforcement) Act.
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HM Treasury
3
Recommendation
Eleventh Report - Economic Crime
Accepted
The Government should give this work a far higher priority. Economic crime harms consumers and businesses, damages the reputation of the UK as a pre-eminent financial centre and, as the NCA says, threatens national security.
Government response AI summary
The government states it takes economic crime seriously and has robust processes in place, including the Economic Crime Plan, and has passed the Economic Crime (Transparency and Enforcement) Act, but does not commit to any new specific actions.
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HM Treasury
7
Recommendation
Eleventh Report - Economic Crime
Accepted
We welcome the Government’s undertaking to be accountable for spending the money raised by the Economic Crime Levy in the way in which it is intended. We recommend 72 Economic Crime that the Government publishes an annual account of its spending on economic crime, including an account of how the …
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We welcome the Government’s undertaking to be accountable for spending the money raised by the Economic Crime Levy in the way in which it is intended. We recommend 72 Economic Crime that the Government publishes an annual account of its spending on economic crime, including an account of how the yield from the Economic Crime Levy has been spent, and an evaluation of its effectiveness.
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Government response AI summary
The government commits to publishing an annual report on the Economic Crime Levy and an evaluation of its effectiveness.
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HM Treasury
10
Recommendation
Eleventh Report - Economic Crime
Accepted
Law enforcement agencies themselves appear to note the mismatch between the scale of the problem and the response. Given the harm involved in economic crime, whether directly affecting consumers or not, the Government must consider why it seems not to be a priority for law enforcement, and how it can …
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Law enforcement agencies themselves appear to note the mismatch between the scale of the problem and the response. Given the harm involved in economic crime, whether directly affecting consumers or not, the Government must consider why it seems not to be a priority for law enforcement, and how it can ensure it becomes one. The Government must ensure that law enforcement agencies are appropriately resourced to tackle the scale of the problem.
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Government response AI summary
The government believes economic crime is a priority for law enforcement, highlighting increased investment of £400m, powers for law enforcement agencies to seize the proceeds of crime, enhanced ability to sanction individuals, and increased law enforcement investigative capacity.
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HM Treasury
11
Conclusion
Eleventh Report - Economic Crime
Accepted
There may be many reasons for low prioritisation of economic crime by crime- fighting agencies. It does not happen in the street, but often in people’s homes. Consumers often, apart from inconvenience, do not suffer directly, since they may be repaid by banks. But these are not reasons to not …
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There may be many reasons for low prioritisation of economic crime by crime- fighting agencies. It does not happen in the street, but often in people’s homes. Consumers often, apart from inconvenience, do not suffer directly, since they may be repaid by banks. But these are not reasons to not engage more forcefully with the problem.
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Government response AI summary
The government believes economic crime is a priority for law enforcement, highlighting increased investment of £400m, powers for law enforcement agencies to seize the proceeds of crime, enhanced ability to sanction individuals, and increased law enforcement investigative capacity.
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HM Treasury
13
Recommendation
Eleventh Report - Economic Crime
Accepted
We agree with the Joint Committee that the Draft Online Safety Bill should be amended so as to include fraud offences in the list of “relevant offences” in Clause 41(4) of the Bill. Fraudulent content should be designated as “priority illegal content”, thereby requiring online firms to be proactive rather …
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We agree with the Joint Committee that the Draft Online Safety Bill should be amended so as to include fraud offences in the list of “relevant offences” in Clause 41(4) of the Bill. Fraudulent content should be designated as “priority illegal content”, thereby requiring online firms to be proactive rather than reactive in removing it from their platforms. These steps would place greater responsibility on online companies to prevent their platforms from being used to promote financial fraud, something of which these online firms are capable. (Paragraph 74) Economic Crime 73
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Government response AI summary
The Government announced that it would be strengthening the Online Safety Bill to include user-generated fraud offences, legally requiring social media platforms and search engines to take steps to protect their users from fraudulent content.
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HM Treasury
14
Recommendation
Eleventh Report - Economic Crime
Accepted
We reiterate our strong belief that the Government should include measures to address fraud via online advertising in the Online Safety Bill, in the interests of preventing further harm to customers being offered fraudulent financial products.
Government response AI summary
The Government announced that it would be strengthening the Online Safety Bill to include user-generated fraud offences, meaning that social media platforms and search engines will be legally required to take steps to protect their users from fraudulent content.
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HM Treasury
21
Conclusion
Eleventh Report - Economic Crime
Accepted
The Joint Committee on the Draft Online Safety Bill concluded that self-regulation of online platforms had failed. It is true that there have been many failings, and it is right that action should now be taken to place more responsibility on online firms to prevent harm from fraud and other …
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The Joint Committee on the Draft Online Safety Bill concluded that self-regulation of online platforms had failed. It is true that there have been many failings, and it is right that action should now be taken to place more responsibility on online firms to prevent harm from fraud and other economic crimes which their platforms and services have facilitated. However, the formation of the Online Fraud Steering Group is evidence that co-operative working between the private and public sectors can help improve outcomes and compliance. A number of online companies also showed in their evidence to us that they are taking a more constructive approach to co-operation with law enforcement agencies.
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Government response AI summary
The government states that it takes the threat of economic crime extremely seriously and has developed robust processes, including the Online Fraud Steering Group and the Economic Crime Plan, to ensure an effective and coordinated response.
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HM Treasury
22
Conclusion
Eleventh Report - Economic Crime
Accepted
We welcome the setting up of the Online Fraud Steering Group, and we encourage all online companies to work constructively with Government agencies and the 74 Economic Crime wider public sector to fight online scams and fraud. The Government is correct to recognise in this area, as in the Economic …
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We welcome the setting up of the Online Fraud Steering Group, and we encourage all online companies to work constructively with Government agencies and the 74 Economic Crime wider public sector to fight online scams and fraud. The Government is correct to recognise in this area, as in the Economic Crime Plan more generally, that a public- private partnership approach is needed.
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Government response AI summary
The government states that it takes the threat of economic crime extremely seriously and has developed robust processes, including the Online Fraud Steering Group and the Economic Crime Plan, to ensure an effective and coordinated response.
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HM Treasury
23
Recommendation
Eleventh Report - Economic Crime
Accepted
The Government should build on these foundations when it updates the Economic Crime Plan. But it should also ensure that regulators and law enforcement agencies have the powers they need to ensure that online companies provide them with information and comply with regulatory requirements. (Paragraph 105) Authorised push payment fraud
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The Government should build on these foundations when it updates the Economic Crime Plan. But it should also ensure that regulators and law enforcement agencies have the powers they need to ensure that online companies provide them with information and comply with regulatory requirements. (Paragraph 105) Authorised push payment fraud
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Government response AI summary
The government states it already takes the threat of economic crime extremely seriously and has developed robust processes and passed the Economic Crime (Transparency and Enforcement) Act on 15 March.
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HM Treasury
26
Recommendation
Eleventh Report - Economic Crime
Accepted
We recommend that the Government urgently legislates to give the Payment Systems Regulator (PSR) powers to make reimbursement mandatory, and that the PSR then take rapid action to protect consumers. We recommend that the PSR and Treasury accelerate their consultation processes to enable quicker implementation of measures to protect consumers …
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We recommend that the Government urgently legislates to give the Payment Systems Regulator (PSR) powers to make reimbursement mandatory, and that the PSR then take rapid action to protect consumers. We recommend that the PSR and Treasury accelerate their consultation processes to enable quicker implementation of measures to protect consumers from fraud.
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Government response AI summary
The government continues to work with the PSR to address the barriers to regulatory action and is ready to impose measures that require PSPs to reimburse APP scam victims, following legislative change, and will publicly announce their approach in autumn 2022.
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HM Treasury
27
Conclusion
Eleventh Report - Economic Crime
Accepted
We welcome the introduction of the Confirmation of Payee service in 2019, as recommended by our predecessor Committee. We also welcome the work the Payment Systems Regulator is doing to broaden its scope through the introduction of Phase 2, extending and enhancing the service.
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We welcome the introduction of the Confirmation of Payee service in 2019, as recommended by our predecessor Committee. We also welcome the work the Payment Systems Regulator is doing to broaden its scope through the introduction of Phase 2, extending and enhancing the service.
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Government response AI summary
The PSR issued Specific Direction 11 (SD11), requiring Pay.UK to close phase 1 CoP by the end of May so that all PSPs are using the Phase 2 technical environment.
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HM Treasury
50
Conclusion
Eleventh Report - Economic Crime
Accepted
Reform of Companies House is essential if UK companies are no longer to be used to launder money and conduct economic crime. We welcome the work being done by the Department for Business, Energy and Industrial Strategy and by Companies House to modernise the legal framework and operations of Companies …
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Reform of Companies House is essential if UK companies are no longer to be used to launder money and conduct economic crime. We welcome the work being done by the Department for Business, Energy and Industrial Strategy and by Companies House to modernise the legal framework and operations of Companies House. However, the pace of change is slow. The problems with UK company structures were identified by the Government in 2014 in the UK Anti-Corruption Plan. While there have been welcome innovations, such as the People with Significant Control register, on current plans it will have taken over 10 years to improve matters, during which time a large number of UK companies may have been put to criminal use by a wide range of criminals.
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Government response AI summary
The government recognises the importance of delivering Companies House reform, and says HM Treasury has provided BEIS with £63 million over the Spending Review period to facilitate reforms.
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HM Treasury
51
Recommendation
Eleventh Report - Economic Crime
Accepted
Waiting until the operational transformation of Companies House is complete risks further delay beyond 2025 if, as with many public sector change and IT projects, 78 Economic Crime unexpected difficulties slow project delivery. Given the urgency of the problem, the Government should seek ways to implement as many reforms as …
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Waiting until the operational transformation of Companies House is complete risks further delay beyond 2025 if, as with many public sector change and IT projects, 78 Economic Crime unexpected difficulties slow project delivery. Given the urgency of the problem, the Government should seek ways to implement as many reforms as possible sooner, before embedding a full transformation.
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Government response AI summary
The government has allocated £63 million over the Spending Review period to BEIS to facilitate Companies House reforms and ensure that the Economic Crime (Transparency and Enforcement) Act can be operationalised quickly.
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HM Treasury
53
Conclusion
Eleventh Report - Economic Crime
Accepted
The low costs of company formation, and of other Companies House fees (such as filing fees), present little barrier to those who wish to set up large numbers of companies for dubious purposes. The UK should be charging fees similar to those in other countries, which would yield significant extra …
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The low costs of company formation, and of other Companies House fees (such as filing fees), present little barrier to those who wish to set up large numbers of companies for dubious purposes. The UK should be charging fees similar to those in other countries, which would yield significant extra funding for Companies House and for the wider fight against economic crime. An increased cost may also deter some formations, reducing the operational demands on Companies House. Large numbers of registrations of companies place cost burdens on other parts of the public sector, such as HMRC, and on the regulators and law enforcement agencies tackling economic crime. There is a strong case that the cost should reflect the wider burdens on the taxpayer and not just the marginal cost to Companies House.
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Government response AI summary
The government believes the current fees for company formation are too low, and has committed to increasing fees for company registration and other services, as set out in the White Paper on Corporate Transparency and Register Reform.
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HM Treasury
54
Recommendation
Eleventh Report - Economic Crime
Accepted
The Government should significantly increase the costs of company and Limited Liability Partnership incorporation, including Scottish Limited Partnerships, and should review other Companies House fees to bring them closer to international standards. A fee of £100 for company formation would not deter genuine entrepreneurs, and would raise significant additional funding …
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The Government should significantly increase the costs of company and Limited Liability Partnership incorporation, including Scottish Limited Partnerships, and should review other Companies House fees to bring them closer to international standards. A fee of £100 for company formation would not deter genuine entrepreneurs, and would raise significant additional funding for Companies House and for the fight against economic crime. It would also help compensate for the wider costs on the public sector of large numbers of company formations.
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Government response AI summary
The government has committed to increasing fees for company registration and other services, as set out in the White Paper on Corporate Transparency and Register Reform, and will bring forward legislation in the Third Session to deliver these changes.
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HM Treasury
55
Conclusion
Eleventh Report - Economic Crime
Accepted
We are disappointed that the Registration of Overseas Entities Bill is still awaiting introduction, more than five years after it was promised, and after scrutiny by a Joint Committee. Improving transparency of ownership of UK property is an important step that needs to be taken in order to improve defences …
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We are disappointed that the Registration of Overseas Entities Bill is still awaiting introduction, more than five years after it was promised, and after scrutiny by a Joint Committee. Improving transparency of ownership of UK property is an important step that needs to be taken in order to improve defences against misuse of UK assets and companies by criminals and kleptocrats.
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Government response AI summary
The government agrees with the importance of transparency and highlights that the Economic Crime (Transparency and Enforcement) Act, which introduces the Register of Overseas Entities, received Royal Assent on 15 March.
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HM Treasury
56
Recommendation
Eleventh Report - Economic Crime
Accepted
We urge the Government to include a Registration of Overseas Entities Bill in the Queen’s Speech for the next Parliamentary session. (Paragraph 247) Economic Crime 79
Government response AI summary
The government states that improving transparency of ownership of UK property is an important step and that they prioritised the Economic Crime (Transparency and Enforcement) Act, which received Royal Assent on 15 March and introduces the Register of Overseas Entities.
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HM Treasury