UK money laundering: How they get away with it


Click to follow
The Independent Online

Schools and universities are small, unwitting elements of a growing industry of “gatekeepers” to the UK for foreign money launderers.

Solicitors, estate agents and financial advisers are seen as far bigger culprits letting dirty money enter the UK system. Currently – amid concerns about a visit next year to the UK from the international anti moneyl aundering body, the Financial Action Task Force – hundreds of law firms across the country are undergoing checks from their regulator into how much care they take to keep out the criminals.

Sources say the FATF has become increasingly concerned about the rising number of legal actions being taken in London by foreign nationals, who have become a huge source of earnings, particularly for big City law firms. Fraud experts say much of this action is funded by laundered money from countries such as Russia and the former Soviet republics. Analysts expect the inspectors from the Solicitors Regulation Authority to run into stonewalling as lawyers claim professional client privilege to keep suspicions about their clients secret.

A similar exercise carried out on UK banks found several were breaching guidelines, particularly with the checks being carried out on so-called “politically exposed persons” – elite officials and their families. The Financial Conduct Authority last year handed out a series of multi-million pound fines to banks including Coutts, Standard Bank and EFG.

A money-laundering expert from Global Witness, Stuart McWilliam, said: “Banks still have a woeful record of failing to spot and report suspect funds.”

But no such investigation has yet taken place into estate agents, who are seen as crucial gatekeepers to washing foreign billionaires’ ill-gotten cash. Dirty money is widely seen as being a key reason central London property prices have increased so dramatically. Estate agents, like bankers and lawyers, are supposed to file suspicious activity reports to the police when they think laundered money may be being used by customers, but they are only legally obliged to carry out checks on sellers, not buyers. In 2012-13, estate agents filed only 215 such reports.

Transparency International wants art and jewellery dealers, auction houses, estate agents, lawyers and accountants to all be subject to anti-money laundering regulations.