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Are Educational Institutes Becoming the Next Target for Money Laundering?

According to an investigation by The Times, higher-educational institutes have been unintentionally involved in facilitating money launderers. They accept millions of pounds in a form of tuition fee from international students belonging to countries that are considered high-risk for money laundering and terrorism financing.

Up to 49 universities in Britain accept banknotes to pay £52 million amount in fees from countries like China, India, Russia, and Nigeria.

The financial crime experts have disclosed that the universities have turned a blind eye for being used for money laundering activities from foreign parties. The experts say that these institutes have put a welcome mat for money launderers and kleptocrats from around the world. Due to the cash payments, the trail of the money becomes obscured and the police or regulatory authorities cannot track them back to the real source.

However, the university administration claims that they carry out checks on the funds being deposited. Unfortunately, there has only been a report of 24 suspicious activities that was filed with the National Crime Agency.

Most of the universities argued that they carry a strong due diligence procedure and do not accept the fees in 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 National Crime Agency said that foreign students have become a target for money laundering. Authorities have previously frozen up to 95 UK bank accounts that contained approximately 3.6 million pounds held by foreign students. Regulatory authorities should look towards strictly applying AML screening solution in the educational sector.

According to a former US government security analyst, “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.”