Switzerland is an easy and obliging target for hate reports in Anglo-Saxon media outlets, depicted as a refuge for dirty money guarded by gnomes. Now, an official report by her majesty's government shows that billions of pounds from illegal activities are being laundered in the U.K. every year.
The Home Office and Treasury specialists don't hold back in their report about the activities on the world's largest financial market: «The size and complexity of the U.K. financial sector mean it is more exposed to criminality than financial sectors in many other countries.»
And further: «The law enforcement response to money laundering has been weak for an extended period of time.»
Harsh Conclusion
The British government came to that harsh conclusion in its first report on the risks of money laundering and terrorist financing. The finding of the «National Risk Assessment» (NRA) were recently published by the Home Office.
What the U.K.'s financial market and in particular its media studiously ignored for years while pointing their fingers at others, has been laid bare: The financial industry of the U.K. is extremely vulnerable to illegal activities, in particular what we know as white-collar crime.
Billions Laundered
Specialists of the government estimate «that billions of pounds of suspected proceeds of corruption are laundered through the UK each year.» This is a serious headache for the government in its fight against terrorism.
Non-governmental organizations (NGOs) estimate the amount of money being laundered every year in the U.K. at 57 billion pounds, or roughly 84 billion francs. Transparency International in March called London's property market a home for corrupt money.
Threat to the National Security
«There is a marked overlap between money laundering and terrorist financing - both criminals and terrorists use similar methods to store and move funds,» the report states. «There is evidence of terrorist financing activity in the U.K. and terrorist financing poses a significant threat to the U.K.’s national security.»
The investigation unearthed significant gaps in the knowledge about high-end money laundering, which was particularly endemic in crimes involving corruption and fraud. Tainted funds were transferred through accounts, properties and investments.
The Spotlight Is on
The law enforcement agencies were eager to get rid of the blind spots, and aimed to learn more about the roles played by banks, lawyers, accountants and trusts, the report stated. The authorities assume that the risks in this sector were significant, which is why it is important to gather more intelligence.
In other words, U.K. financial services companies will find themselves under the spotlight. The report has early suggestions for how this could come about.
Mixed Response
The government for instance wants to tap the gaps in the pursuit of high-end money laundering. It was important to extend the authorities investigative abilities and the cooperation with the private sector, the report said.
In the City, the government's findings received a mixed response. Some claim that the U.K. had one of the tightest money-laundering legislation in the world. This argument has been used before – in cases of Swiss money laundering.
