As the International Consortium of Investigative Journalists reports this morning, the FinCEN Files that it has uncovered show trillions in tainted dollars flow freely through major banks around the world, swamping a broken money laundering enforcement system. Their key findings are:
- Global financial giants have moved a flood of dirty money tied to mobsters, fraudsters and corrupt regimes.
- Big banks shift money for people they can't identify and in many cases fail to report suspect transactions until years after the fact.
- Government fines and threats of criminal prosecutions against banks haven't stopped a tide of illicit payments.
As I have argued, time in again and over many years, the UK's refusal to put in place a proper company regulatory regime is a key component in creating this money laundering opportunity. The UK does now require:
- Proof of the beneficial ownership of companies;
- The identification of all members of a company on public record on an annual basis;
- Full rather than abbreviated accounts on public record, whatever the size of a company;
- That rthe directors of companies have unlimited liability if they fail to comply with their regulatory obligations;
- That banks be required to report annually their understanding of the beneficial ownership of companies to Companies House to ensure that the information supplied by a company to banks and regulators is the same.
There is quite literally no reason why these measures could not be put in place and at relatively little cost, particularly given that the current annual registration fee for a company is just £13 a year. But, our government refuses to put in place the measures that are necessary to prevent money-laundering, to provide information to protect the public from abuse from limited companies, and to provide a level playing field on which all businesses can compete. The sad reality is that it proves itself to be anti-market in the process. Except for the fact that this is happening, and has been persistent government policy, it would be hard to make such a thing up.
Now would be a perfect time for reform, but I really cannot see it happening: this government appears to be wedded to corruption.
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It’s clear from a string of reports over recent years, that the City’s business model and indeed its usp is its unique ability to launder funny money around the world -including through its offshore satellites.
Therefore its no accident that none of these simple reforms have been instituted. After all , we are very proud of the CIty- the twinkling jewel at the heart of our otherwise feeble economy.
Many have been waiting for this mass of data to emerge.
Can’t expect turkeys to vote for Christmas, after all who will pay for the next election?
The next election, you say? Why would you (or anyone really) imagine there’ll be one? I’m sure that’s not the plan…
I ceased believing Britain was capable of genuine reform years ago. The Financial Crash and its consequences was the final nail in the coffin of that expectation (although held without much conviction). We are overrun by our own pirates. For years there was an official FCA website (or whomsoever the regulator then was – it changed at some point; they rarely last long, or amount to much as “regulators”; and who cared who they were or what they did?). This website listed both the fines and the scale of the individual fines regularly doled out to the financial sector for their abject post-crash failures. Huge figures for fines were set (sometimes I added together tens or hundreds of millions in fines, covering a very short period), often for “mis-selling” (an esoteric and mystifying concept that was never adequately explained) but it was all ‘small beer’ in financial terms in any case; and I recall expert opinion termed such costs not as penalties, but as merely “the cost of doing business”. This is the real nature of Britain.
It distresses me to see Scotland part of all this.
The Jersey States (Government assembly) meets again tomorrow and you can bet that the latest “FINcen” news will be in nobody’s mind or on any agenda…and there is general election campaign taking place in Guernsey with over 100 candidates…but these matters will not feature in any campaigns.
So who do you expect to deal with these scandals?
The same or similar problems have been on the international and domestic lists of things to be dealt with for centuries – what is different now?
The value of the role of investigative journalists is shown once again.
Meanwhile, Julian Assange is facing extradition for this activity ; not least for exposing American war crimes.
Could the lack of action by Cummings/Johnson have something to do with the questionable banking practises of some of the Tory’s donors that were exposed in tonight’s Panorama documentary.
Banking Secrets of the Rich and Powerful – Panorama
It’s the leak that reveals the secrets of British banking. Panorama uncovers secret reports that expose how banks have failed to tackle crime and how terrorists, money launderers and crime bosses are able to use the same banks as us. Reporter Richard Bilton also exposes the double life of the man who funded the Brexit Party, secret deals at the top of British football and the business deals billionaires would rather you didn’t know about.
https://www.bbc.co.uk/programmes/m000mv1s
Richard, do you really not understand what a SARs report is?
I certainly do
I am a money laundering officer
A money laundering officer for what company?
Fulcrum, Chartered Accountants
I am the sole proprietor
And I admit it has not got many clients
But I have to make sure I know what I;’m doing, nonetheless
When I write it’s based on knowing stuff, in reality
“I am a money laundering officer”..is there any limit to your talents?
Try being a sole practitioner accountant and not be a money laundering officer…..
I’ve made a SAR report, but never got any sense that anything was done with it. It’s not a frequent topic of conversation, but to the extent people do talk about this kind of thing my impression is that this is the almost universal experience. It would be interesting to know what proportion of SARs are in fact acted on. No doubt statistics are available.
The report I made was some years ago, and I may not be up to date with the regs, but if banks or others have made a report they are I think entitled after a period of time to go ahead with the transaction, if the regulator has not objected to them doing so. So banks are not doing anything wrong if they do (and of course if they explained to their clients why they were not going to follow their client’s instructions, they would be committing an offence).
The only meaningful change that could be made would be to make it an offence to assist wth a transaction if there is a reasonable suspicion that it involves the proceeds of crime. So if they had a suspicion they would have to withdraw (as opposed to simply having to report?
Is this what you would suggest? Or is the solution many more resources put into investigation?
(Oh, and why do we refer to “SARs reports”, when the R of SARs itself refers to reports – we’re saying Suspicious Activity Reports reports?)
I admit my own experience is Similar to yours
I have submitted SARS
I got consent to continue and heard nothing more
But I also got rid of the clients involved asap
Watch this film and it’s obvious why the U.K. doesn’t enact such legislation
https://www.filmsforaction.org/watch/the-spiders-web-britains-second-empire/
Yes, this film sums up very well the reality of the City’s financial operations.
Yes, and the class links of both city and government. Essentially, the business of the ruling class is money laundering disguised as banking.
From their neglect of other industries (except those where they can park some money in assets, eg real estate), it seems to me that are not interested in any business other than their own.
It’s not a democracy when a special club rules only in their interest, whatever the forms and institutions which may be in place.
I think that’s an extreme view
But the issue is real
Hi Richard,
“…The UK does not require:…”
Should that be “now require”?
Thanks
Changed
[…] mentioned yesterday the new requirements that I thought were necessary to ensure that the UK has a functioning company […]
Let’s be clear about what dirty money is: it’s the proceeds of, or seed capital for, criminal activity such as tax fraud, people smuggling, drug manufacture and distribution, illegal arms dealing, racketeering, slave trafficking etc.
The world’s most vulnerable souls, caught up in conflicts financed and supplied by the West, are ruthlessly exploited and the proceeds are being washed through the London markets. House price inflation fuelled by this dark money, means that ordinary folk, including almost all essential workers, cannot buy a family house within a decent travel time to work.
Are Tory voters aware of this outrage? Do they care, esp if the value of their house is booming? Do they care that UK is now almost a pariah state?
They really are the nasty party and still riding quite high in the polls, even although they have been shown to be utterly incompetent re the pandemic.
I really fear for England.
I worked with and around organisations in the City over many years, including for Standard Chartered for a few years and also KPMG. Ive even been on the money laundering courses (how to spot, not how to do it!). I have no doubt that every word in the programme is true. Equally I have no doubt that absolutely nothing will be done about it as the Government and Conservative party are in it up to their necks.
Its been a standing joke for years that if you open an account with £10 you have to fill in all the forms and do all the checks. £10 million? ‘How can we help you sir?!’ £100 million? Let me carry your bags for you sir.
It used to be that it was about keeping an eye on bags full of suspicious cash. Standard Chartered even had a branch in Mayfair specifically to handle such deposits and to be fair I suspect the staff there were doing a proper job. Now its all about electronic transfers and very few people need to be aware of what is going on. The lawyers and accountants will be in on the act too of course.
As regular visitors to the blog will know, all this is strongly linked to Brexit and the funders behind Brexit, UKIP and the Conservatives who see the EU as a constraint on the criminal activities of sections of the City.
Critics of Blair always focus on Iraq (and yes I was on the march). I’d argue that for citizens of the UK, their failure to clamp down on the City and its destructive activities was much more important, along with the outsourcing and PFIs
I strongly suspect the Brexit link Robin
And it worries me greatly: know a person by the company they keep
I cannot think of any other group or sector in the UK and its economy who could possibly benefit from Brexit. Hedge funds and vulture capitalists (picking up distressed companies on the cheap) have been big funders of Brexit.
Follow the money as ever