Many legitimate businesses are unknowingly being used to launder the proceeds of criminal activity. In the past, the authorities have been largely ignorant of such losses, as many businesses have preferred to write off the loss rather than commit time and resources to investigation. In future, warns PKF, this may not be possible.
Proposals outlined in the Home Office White Paper One Step Ahead - a 21st century strategy to defeat organised crime suggest that solicitors, accountants and other consultants will be required to report frauds, thefts, corruption and suspicions of criminal activity to the authorities. Additional resources are being given to the agencies responsible for tackling fraud, corruption and theft. Follow-up investigations by the Inland Revenue, Customs & Excise, police or other agencies, may soon require businesses to provide information on criminal losses. PKF recommends that businesses should:
- establish policies and a culture that encourages reporting criminal losses to a central point in the organisation
- hold a preliminary investigation into all criminal losses, so that if there is more going on than first meets the eye, directors find out as soon as possible.
- establish protocols to determine when criminal losses should be investigated in more depth and to determine when they are reported.
- build business relationships with professional firms that have the expertise to investigate possible criminal losses.
