Behind Closed Books: Money Laundering in UK Insolvency Proceedings

Money laundering costs the UK economy £100 billion annually (NCA 2019), infiltrating key sectors and prompting economic disruption and social inequalities. Insolvency practitioners, as regulated entities under the UK anti-money laundering (AML) regime, play a critical role in combating this crime. However, their AML practices have received limited attention.

While other sectors of the UK economy have faced scrutiny regarding AML implementation (Zavoli and King 2021), the insolvency sector remains largely overlooked. The 2020 National Risk Assessment identified insolvency as a target of money launderers, and in February 2024, the UK Government established an AML Intelligence Cell within the Insolvency Service. However, no studies have explored the money laundering risks of the sector and the lived realities of the practitioners operating in it.

This pioneering work is an important first step in addressing this gap and providing valuable insights into this unexplored area. By bringing together practitioners and experts in collaborative working events, it offers a crucial opportunity to generate societal impact by shaping future AML regulation in insolvency.

The project includes a one-day conference and the establishment of a network of academic researchers, practitioners, professional associations, and policymakers to inform future AML policy and legislative approaches in insolvency proceedings.
 

Impact

The project’s primary goal and impact is to influence AML policies by determining the priorities and needs of practitioners and stakeholders in the insolvency sector.

In so doing, we will achieve conceptual impact (communicating the meaning of research beyond academia and contributing to reframing public debates) and instrumental impact (influencing policies and laws, prompting dialogue and deliberation, and informing decision-making). In particular, by adopting an innovative bottom-up approach, the co-produced conference report will propose a fresh perspective that directly informs the policy and regulatory agenda of UK AML agencies.

The existing UK AML regime in insolvency lacks the direct input of those at the forefront of the sector; practitioners whose practice-based insights are essential for effective regulatory implementation. This project will address this gap by identifying priority areas and themes that might be included in future AML regulation.

With recent developments in the UK AML landscape in insolvency, including the establishment of an AML Intelligence Cell within the Insolvency Service in February 2024, the timing of this project is crucial. The proposed conference and co-produced report will arrive at a pivotal moment, capable of significantly influencing the direction and activities of these new AML agencies, ensuring that practitioners’ insights are central to the UK AML strategy in insolvency.

Publications and outputs

The project will deliver four pivotal outcomes designed to drive significant impact. First, we will organise a one-day conference in July 2025 on money laundering in insolvency proceedings. This event will bring together leading academic and non-academic experts to tackle the urgent challenges of AML implementation and the risks of criminal infiltration within the UK economy.

Second, we will co-produce a report with the IPA AML Team to distil critical insights and innovative solutions discussed during the conference. The report will be strategically disseminated to relevant stakeholders.

Third, we will create a video that captures the reports’ findings and resonates with the broader audience of stakeholders to whom it will be disseminated. The video’s targeted audience will include UK insolvency practitioners, legal advisors involved in insolvency matters, policymakers and UK AML regulatory bodies. The video will be hosted on a dedicated project’s webpage part of the University of Leeds’ website free of charge. The video will be further disseminated during and after the project ends, through social media (e.g. LinkedIn, X), the non-academic partner’s newsletters and website, and at conferences and seminars where the researchers will showcase the project, e.g. IPA Annual Conference and the Annual Insolvency Service Forward Thinking Conference.

Finally, we will set up a network of experts dedicated to fostering collaborative governance approaches to AML in insolvency. This network will serve as a catalyst for innovation and cooperation in combating money laundering on a global scale.