Forging a virtuous circle: Reinvesting fines and criminal assets to turbocharge the fight against economic crime

The UK agencies tasked with fighting economic crime together generate £566 million pounds on average each year for the government through seizing criminal assets and imposing regulatory and criminal fines. But despite these agencies’ major contribution to the public purse, the Treasury holds on to most of these funds. Meanwhile, these agencies are left chronically underfunded, struggling to attract and retain specialist staff and held back by outdated technology.

It is not clear that the little money which is reinvested into agencies is spent as effectively as it should be. While some is used to incentivise and drive innovation in asset recovery, in other instances it is spent on pet projects – in one case funding an inter-police force yacht race – rather than on increasing the UK’s asset recovery efforts as it is meant to do.

Our report finds that the current system which enables the reinvestment of funds generated through enforcement – the Asset Recovery Incentivisation Scheme (ARIS) – is opaque, encourages agencies to go after low-hanging fruit, and overlooks the wider benefits of financial investigation beyond asset recovery. The Home Office is in the dark about how millions are spent through the scheme and agencies spend ARIS funds with very little accountability.

The last government committed to explore how more funds could be reinvested through ARIS for tackling economic crime. However, there are real questions as to whether tinkering around the edges with ARIS will be the gamechanger needed to deliver the UK government’s ambition to recover more criminal assets.

The previous government committed in 2023 to recover an additional £1 billion in criminal assets on top of current asset recovery efforts. However, despite promising rises in the past two years, asset recovery decreased by 29% on the previous year in 2023/24.

Furthermore, it is not clear that the UK’s current asset recovery efforts are commensurate with the level needed to deter criminals and prevent the UK being a major hub for money laundering. The £243.3 million recovered in 2023/24 represents just 0.2% of the £100 billion a year the National
Crime Agency assesses could realistically be laundered through the UK.

In 2027, the UK will face a review by the global money laundering watchdog, the Financial Action Task Force (FATF). New global standards on asset recovery will be a key feature of that review. Against these standards, the UK will be assessed on whether criminals are permanently deprived of their proceeds of crime, and whether it has provided sufficient resources to enforcement bodies to effectively pursue asset recovery.

An urgent rethink about how assets are reinvested back into law enforcement is needed if the UK is to show that it will turbocharge asset recovery efforts and once again play a leadership role on the global stage.

Our report argues that revamping ARIS to create an Economic Crime Fighting Fund (ECFF) that builds on its strengths but avoids its shortcomings would create a virtuous circle where reinvested assets generate better criminal justice outcomes, more funds for victim compensation, and greater recovery of criminal assets.