International efforts to block the looting of poor countries by corrupt governments are hampered by the lack of a single body to combat money laundering in the UK, according to a government-sponsored study.

Combating money laundering and recovering looted gains, by Transparency International, calls on the government to fund asset-recovery actions by foreign governments and to make a ‘clear decision’ on whether to wind down financial centres in overseas territories.

Transparency International, a non-governmental organisation campaigning against corruption, says that corrupt leaders of poor countries steal up to $40bn each year. UK financial institutions are often used as repositories. While a multiplicity of UK agencies are involved in anti-money laundering and asset recovery, none has overall responsibility, the report says. ‘International cooperation appears to be frustrated at times because some foreign governments are apparently unable to access the right UK authorities for help with investigations.’

The report, partly funded by the Department for International Development, calls for the removal of ‘structural, financial and judicial hurdles’ to asset-recovery procedures.

Proposals include removing the right of defendants to challenge UK courts’ jurisdiction to determine claims concerning assets in the UK.

The report also calls for legal funding from public sources as private sector third party litigation funders ‘often demand an unacceptably high proportion of recoveries’.

The role of UK overseas territories comes under scrutiny in the report, which says some of the smaller territories such as the Turks and Caicos Islands have ‘very limited regulatory and law enforcement capability’. It recommends that the government ‘work to establish clear criteria for the identification of non-cooperative tax havens and financial centres. Such criteria should result in a distinction between those who cooperate and those that do not. Those that continue to refuse to meet international standards and refuse to exchange information should be subject to sanctions as long as they continue to act in this way’.