The London Laundromat

 It is official - albeit published only by a leak: London is the place to go if you wish to legalise large amounts of money gained through illegal drugs, people trafficking and prostitution. Fewer questions are asked by British banks about the source of funds and there are fewer checks on companies set up here. 

FinCEN Files is based on a leak. Buzzfeed News shared with the International Consortium of Investigative Journalists (ICIJ), the people who brought us the Panama Papers, more than 2,100 suspicious activity reports, or SARs, filed by global banks to the U.S. Treasury Department’s intelligence unit, the Financial Crimes Enforcement Network, known as FinCEN. The U.S. Congress requested some of the files as part of the investigation into Russian interference in the 2016 election.

The US regulators have designated the UK as a "higher risk jurisdiction" along with Cyprus, notorious for processing the money of Russian oligarchs. Over 3,000 UK companies are inmplcated in Suspicious Activity Reports, more than from any other country. JP Morgan allowed a company to move more than $1bn through a London account without knowing who owned it. The bank later discovered the company might be owned by a mobster on the FBI's 10 Most Wanted list. There is evidence that one of Russian President Vladimir Putin's closest associates used Barclays Bank in London to avoid sanctions which were meant to stop him using financial services in the West. Some of the cash was used to buy works of art.  Standard Chartered moved cash for Arab Bank for more than a decade after clients' accounts at the Jordanian bank had been used in funding terrorism. Deutsche Bank, which once held the Irish economy to ransom, is exposed as another culprit. 

Most worrying personally (it is where I bank) HSBC allowed fraudsters to move millions of dollars of stolen money around the world, even after it learned from US investigators the scheme was a scam. BBC Business News this morning recalled that HSBC in the US avoided a criminal prosecution because of a high-level intervention by then Chancellor, George Osborne, himself tightly involved with Russian oligarchs.

Private Eye has reported continually of instances of suspicious financial activity and of lax checks on company formation and reporting in the UK. It is good to have confirmation of these and revelation of the larger picture. It is also good that Companies House maintains a register which is open to inspection by members of the public. But we should not have to rely on specific investigations by journalists or the curiosity of the ordinary citizen to draw attention to dubious companies. Companies House should be given powers to enforce registration regulations at the very least.

For links to more detail, see https://www.icij.org/investigations/fincen-files/.