Just 28% of criminal assets frozen by law enforcement get permanently recovered, warns Spotlight

UK law enforcement agencies are struggling to make a dent in the huge sums of dirty money washing through the UK, and are permanently recovering just £1 in every £4 of suspected criminal assets frozen. 

This is despite the introduction of McMafia orders in 2017, and two new pieces of economic crime legislation in the past five years, according to a new report from Spotlight on Corruption.

The anti-corruption charity’s report, Targeting the Untouchables, charts the UK’s asset recovery efforts since the introduction of the Criminal Finances Act 2017 and finds that rates of successful recovery of frozen criminal funds have plateaued. 

With a realistic probability that £700 billion of dirty money passed through the UK economy over the past 7 years, just £6.8 billion has been frozen, and of that only £1.9 billion permanently recovered. That means less than 1% of the UK’s dirty money is being frozen and just 0.3% taken off criminals for good. 

The new tools introduced in 2017 meanwhile have had mixed results. Unexplained Wealth Orders (aka McMafia orders) have contributed towards just 2.3% of assets recovered. The less high profile Account Freezing Orders have performed much better and account for 60% of all funds frozen, but less than a third (29%) of this money has actually been recovered. 

The report also argues that because of the difficulties of recovering illicit wealth from kleptocrats and corrupt elites, law enforcement bodies are increasingly resorting to settlements in high-end money laundering cases, which allow suspects to walk away with a sizeable portion of their suspect wealth and deny wrongdoing. Nine major settlements in these cases have raked in £238 million since 2018 but in five of these settlements (worth £43 million) suspects walked away with a third – or £22 million – of the £65 million worth of assets originally frozen. 

As well as recommending that the government review the effectiveness of current tools for seizing illicit wealth, the report also calls for:

• boosted resourcing and incentives for asset recovery through the creation of an Economic Crime Fighting Fund which will reinvest fines and asset recovery receipts back into law enforcement
• a new asset recovery strategy that lays out new mechanisms for targeting illicit wealth, and guidance to strengthen the safeguards in settlements, and
• specialist economic crime courts with ticketed judges to hear high-end money laundering and complex asset recovery cases.

Dr Helen Taylor, Spotlight’s Deputy Director and a co-author of the report, said:

“Despite bold political rhetoric in recent years about making sure that crime does not pay, the reality is that the illicit wealth of many corrupt elites and organised criminals remains largely untouched. As the UK prepares to host an international summit on illicit finance in 2026 and faces a visit from the Financial Action Task Force in 2027, now is the time to ramp up efforts to end Britain’s role as a magnet for dirty money. By sharpening the asset recovery toolkit and properly incentivising law enforcement to chase down criminal assets, the government has the power to break the criminal business model while recovering more money for victims and delivering more resourcing to fund the fight against dirty money.”

In his foreword to the report, journalist and author Oliver Bullough, said:

“Getting better at asset recovery is not just necessary for its own sake, but also because our failure is allowing criminals, kleptocrats and fraudsters to become more powerful every year, leaving us ever less able to restrain them. The good news, however, is that the reverse is also true. The more of their money we confiscate, the richer we become, so the more resources we are able to bring to fight. The stakes are high, but the potential rewards are immeasurable, and the sooner we start, the sooner we can start reaping them.”