The UK’s National Risk Assessment on Money Laundering and Terrorism Financing (‘the Assessment’) illustrates all too starkly the cost of not recognising the full range of risks that many institutions, including those of academia, often face.

The Assessment warns: ‘The majority of those working in the regulated sector are not complicit in money laundering or terrorist financing. However those working in the regulated sector may aid those involved in money laundering, either unwittingly, or through negligence or non-compliance. Non-compliant or negligent professionals have the potential to cause significant harm by facilitating money laundering and causing reputational damage to their profession.'

Although academic institutions do not currently fall within the ‘regulated sector’, an article in The Times, earlier this year, set out a call from campaigners for stricter supervision of the education sector to prevent it from ‘turning a blind eye to millions of pounds of allegedly dirty money poured into their coffers…’! A dramatic intervention, yes, but one borne out, they say, by the extremely low level of Suspicious Activity Reports (9 in total) filed countrywide and across all academic institutions!

Where, then, does the ‘dirty money’ come from? It seems it is not confined to the plain and straightforward fee paying domestic or foreign student, but rather from a bewildering host of sources: Donations (for buildings, equipment and other facilities), which may be made in order to gain admission to the establishment or, simply, to laundering illicit cash.

  • Sponsorship for research programmes.
  • Grants from private foundations.
  • Sponsorships.
  • Religious communities or institutions.
  • Third party sponsorship of student loans.

Of course, it does not follow that every donation is tainted, but rather that a risk, however high or low, most certainly exists and that, currently, most academic institutions appear to focus their anti-money laundering and countering terrorism financing efforts principally on individual fees.

It hardly needs to be said that a criminal investigation and, worst of all, a prosecution, would have far-reaching consequences for the individual and the institution alike, with inevitable reputational damage, whatever the outcome.

Amicus Legal Consultants

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