Potential for Money Laundering discovered in UK Universities

The Times newspaper has accused Universities of ‘inadvertent Money Laundering after uncovering that they had accepted Millions in GBP in cash from Students with High-Risk jurisdiciton connections in their profile.

Around 50 institutions allowed students use cash to pay upwards of £50 million in fees over the past five years, including persons from China, India, Russia and Nigeria, all of which carry a higher risk of Money Laundering.

Financial crime specialists said the report demonstrated that institutions had ignored being used to launder proceeds of illicit activity. One expert is quoted as saying they were “putting out a welcome mat for the world’s kleptocrats and money launderers”.

All universities said that they had strong due diligence procedures in place and some now refused to accept cash. Universities UK said: “Universities work together with the government, the police service and relevant sector bodies to help protect students and individual institutions from potential money-laundering activity.”

The most prolific institutions tended to be younger, such as Essex, which took £5.4 million and Wolverhampton, which took £2.8 million. Older universities have also received big sums. Manchester University took £5 million, while Nottingham University accepted £1.8 million. Durham also received £440,000 from students

In February that year the authorities froze 95 UK bank accounts containing about £3.6 million, mainly held by overseas students.

Matthew Page, a fellow of Chatham House and a former US government security analyst who specialises in Nigeria, said: “Any educational institution that accepts cash payments is essentially putting out a welcome mat for the world’s kleptocrats and money launderers.

“Universities that accept cash are at high risk of laundering the proceeds of crime, corruption and other illicit activities. Universities that fail to conduct basic due diligence cannot plausibly deny that they are involved in money laundering.”

The institutions insisted that they had strong due-diligence procedures in place to prevent money laundering. Essex specifically said it worked closely with “Lloyds bank and other sector experts to keep up with latest advice”. Wolverhampton said it had stopped taking cash in March last year.

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