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Is United Kingdom losing its costly battle against money laundering?

Citigroup, HSBC, Russian, UK

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Is United Kingdom losing its costly battle against money laundering?

In British newspaper The Wired, Chris Stokel-Walker questioned – “Why do the world’s criminals come to London to launder their dirty money?” It clearly proves, United Kingdom has not only failed in battling against money laundering, it has rather turned into the capital of dirty money.

According to Friedrich Lindenberg of the Organized Crime and Corruption Reporting Project (OCCRP), “It’s a great place for people to settle. You’ve got people who want stable investments in real estate, and want to bring their families and children to a more stable regime. You’ve messed up Russia, right? So where do you want your kids to grow up? Not Russia”.

Analysts and academics argue too much of the money flowing around the UK is the result of crime, corruption and tax dodging. The House of Commons Foreign Affairs Committee has gone further still, calling on the government to make it a “major UK foreign policy priority” to stop the use of London as a base for Russian corruption.

Lindenberg said, and there’s a lot of work to do. “You can walk into the right office in London and set up your British Virgin Islands company, your Panama company, your Guernsey trust,” says Lindenberg. “It’s all handled for you”.

Those complex structures mean it’s nigh-on impossible to put an exact number on the scale of illicit money flowing through the UK. “You can basically write any number and nobody can really do you in for it,” Lindenberg adds. “You can say it’s £2 trillion, or £1 trillion. I think it has to be in the trillions. But it’s really hard to estimate, because I worry we have blind spots.”

“The question to ask ourselves is: are we getting any better at identifying the dirty money, and therefore are we perhaps being more successful?” says Tom Keatinge, director of the Centre for Financial Crime & Security Studies at RUSI, an international security think tank. “I think the answer right now is no we’re not. The advancements we’re implementing are very manual.”

The current provisions for fraud monitoring in the UK financial system are ineffectual, says Keating. There is the Joint Money Laundering Intelligence Task Force, a partnership between government and private industry, including international banks such as Citigroup and HSBC (who were approached for this story, but declined to provide anyone for interview or offer a comment). However, this work is a best a minor move against a massive problem.

“A lot of the work the banks feel obliged to do is of no value other than to placate the regulator,” he says. “Everybody in government and the banks knows full well that much of the compliance work they do is entirely pointless, but that’s what the rules say, and no one has got round to making the rules more sensible.”

When the case of a Bangladeshi family which had smuggled-in millions of dollars into United Kingdom was brought into the knowledge of Joint Money Laundering Intelligence Task Force (JMLITF), it expressed utter surprise.

According to information, a sacked official of Bangladesh Armed Forces Shahid Uddin Khan smuggled out millions of dollars from Bangladesh to various countries including United Kingdom. In 2009, he invested one million Pounds in the United Kingdom in exchange of obtaining immigrant status under visa Tier 1, vide VAF No. 511702. The investment was made in the name of Shahid’s wife Farzana Anjum. The family has established a company named Zumana Investment & Holding Limited in the UK.

United Kingdom never enquired about the legality of the money Shahid and his family had invested, although it is learnt from various sources in Bangladesh that the family had never taken any permission from the Bangladesh Bank for repatriating such a huge amount of money.

In January 2019 it was learnt from various Bangladeshi newspaper reports that Shahid Uddin Khan and his family were actively involved into jihadist activities and were funding militancy groups such as Islamic State (ISIS).

Learning about Shahid Uddin Khan, his wife Farzana Anjum and this couple’s daughter’s specific case of money laundering and involvement into terror financing, the JMLITF sources said, the case should have been brought into their attention by the Bangladesh authorities immediately after it had taken place.

Meanwhile, this correspondent is contacting other agencies in the United Kingdom to learn more about possible legal actions against Shahid Uddin Khan, his wife Farzana Anjum and daughters for specific committing specific offence under the existing law of the country.

The editorial board of Blitz, internationally acclaimed anti-militancy newspaper, is preparing a letter detailing the cases of money laundering and terror financing by Shahid Uddin Khan, his wife Farzana Anjum and daughters, which would be sent to each of the members of the House of Lords, House of Commons as well as other relevant authorities in the United Kingdom, with the request of immediately investigating the case and deporting this jihadist family from Britain.

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Contents published under this byline are those created by the news team of WeeklyBlitz

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