12 ms·

Money laundering in the UK

227 points by akeck 7y ago

mark212 7y ago
What this guide leaves out is the most important part: getting a bank account. I can’t speak to the process in the U.K. but in the United States the “know your customer” rules are quite strict and accounts for businesses are doubly so. Just having a set of incorporation papers won’t work and it can’t be done online (in my experience). Having a duly registered company with fake directors gets you nowhere without a bank account.
- inflatableDodo 7y ago
  You can buy a company with a bank account for a few thousand.
  - wp381640 7y ago
    You can buy an offshore bank not too much more https://www.eternitylaw.net/info/litsenzii/offshore-bank-license/ https://www.eternitylaw.net/info/litsenzii/offshore-bank-lic... http://www.bankinglicensing.com/how-to-purchase-a-bank/banks-for-sale.pdf http://www.bankinglicensing.com/how-to-purchase-a-bank/banks...
    - baybal2 7y ago
      For not too much more, you can buy a shell bank in a much more established economy or had one created for you. All those draconian AML rules on individuals make no sense in light of that.
      - Scoundreller 7y ago
        Effectively, a lot of rules keep individuals honest, but let bigger entities run wild at their expense. It’s Unfair to say the least!
- thaumasiotes 7y ago
  > getting a bank account. I can’t speak to the process in the U.K. but in the United States the “know your customer” rules are quite strict and accounts for businesses are doubly so. Just having a set of incorporation papers won’t work and it can’t be done online (in my experience). This would really hurt the online-only banks if it were true. I opened a (personal) Capital One account online. https://en.wikipedia.org/wiki/Direct_bank https://en.wikipedia.org/wiki/Direct_bank
  - jeanmichelx 7y ago
    You need to submit a passport picture though. It's probably easier to fake a badly lit picture of a passport than an actual passport though...
    - robkop 7y ago
      Lots of people post their passport photos when travelling on instagram, you could quite easily "borrow" one of them to send to the bank.
    - deleted 7y ago
      [deleted]
    - andyhmltn 7y ago
      Not for all of them. All I had to do to get a Starling account was send them a video of me saying my company name
    - sjf 7y ago
      I have opened many online bank accounts using only my social security number. I open bank accounts frequently for the sign up bonuses and haven't ever been asked to submit photo ID online.
- jmakov 7y ago
  Exactly. Obtaining a bank account requires person's ID and tax number. Even if you would know the private tax number, the person in question would get a high income tax and would start to investigate.
- dfraser992 7y ago
  I suppose things have changed a bit since I moved to the UK, but in my experience, the US is infinitely better than than the UK is terms of banking. It was quite easy to open up a business bank account in the US - took one day. Here, it is still hell to open up an initial personal bank account - passport, the residence permits, the proof of address... A few weeks at least. Once you are in the system, it does get a bit easier, but the UK system is still tied to the concept of you're associated with a specific branch at a specific location - it is like the 1950s in some ways. Larger banks are sort of more efficient, but it is not the US at all.
  - ChrisSD 7y ago
    As a UK citizen, that last part doesn't seem true for my personal banking. Once you have an account it's very easy to open others at different banks. Just recently I opened a secondary account with an app only bank. Other finance apps can simply use the API to help you keep track of your own spending, etc. Of course immigrants may have additional hurdles with banking in the UK, I don't know.
    - dfraser992 7y ago
      This was 12 years ago, so things have changed, but man... when I first got here, landlords were wanting 6 months of rent upfront. The system was obviously designed (or it just came out that way) to make it hard for immigrants to initially establish themselves. These days, it is going to get a lot worse once Brexit happens. Perhaps you misunderstood me or I wasn't clear - when I first got here, I tried to deposit a check into my account using another branch / office than the one I where I opened my account. I couldn't. It is not a matter of opening another account with _another_ bank. From the little I know of the banking system, things are or were not then, as wholly integrated as they were in the States. OTOH, the US is only now catching up to the rest of the world w/ Chip and PIN debt/credit cards....
      - foldr 7y ago
        I could certainly deposit checks in any bank branch 12 years ago in the UK. Your experience there seems weird. Even 12 years ago, no-one in the UK really used checks, so that might have something to do with it. Opening an account is indeed unnecessarily difficult for immigrants, and UK landlords can get away with anything due to an almost total absence of regulation.
- mojuba 7y ago
  My understanding is, the purpose of these companies with fictional founders is for founding/owning other companies registered elsewhere. The article does mention that the chain of ownership crosses many borders and can become practically impenetrable or very expensive and time consuming to investigate. So let's say, somewhere in the chain of onwership there are some real unsuspecting people, possibly accounting agencies, managing real banking accounts. By the time you find them the money will be gone, the agencies will disappear, the occupants of the registered postal addresses will be different. You are going to need a lot of official inquiries in multiple countries to trace everything back to the source. It might prove to be almost impossible to do. Or by the time you finish your investigation Putin himself will be gone.
- jmkni 7y ago
  I used to be involved in a UK based startup (as a developer) where we would create a bank account for our customers as a part of the product. The AML/KYC process was outsourced. The customer would go through the registration form, provide their details, and then we would hit up the third party AML/KYC API, which would come back with details on the additional information required. We would then have to chase up the customer for this information (usually a picture of their passport/utility bill, that sort of thing) and provide this back to the third party handling AML/KYC, who would then give authorization to another third party to create the actual bank account. The whole thing seemed ripe for abuse. After a bank account was created, at no point was the customer contacted by the third party to tell them a bank account had been created in their name. If I was malicious and knew somebodies address history, DOB and had a picture of their passport, I could create a bank account for them with a couple of API calls, and they wouldn't have a clue. It used to be that to get a bank account you would have to physically go to the bank and meet a human being first, but we’ve moved away from that. We were closely watched by, and regularly in touch with, the FCA who didn't have any problem with what we were doing.
  - amiga_500 7y ago
    FCA’s job is plausible deniability. Pre 2008 was regulatory arbitrage, begun under Tony Blair, who now has a nothing title at JPM. Gordon Brown, Alistair Darling and many others also took banking jobs after 2008, as did Stephanie Flanders, before this a BBC finance journalist.
- csomar 7y ago
  I got a US bank account by visiting the bank. No questions asked. So did my friend (different bank and state). I think you are over-estimating the KYC or visiting the more reasonable branches. Lots of branches in NY will be more than happy to open a bank account for you and give you a credit card if you have 1500-2000 US dollars.
- pjc50 7y ago
  I'm guessing that the bank account itself is outside the UK, just the corporate structure running through the UK. For example one of the companies mentioned: https://beta.companieshouse.gov.uk/company/OC364391/filing-history https://beta.companieshouse.gov.uk/company/OC364391/filing-h... : the two "members" of the limited liability partnership are Marteza Alliance Ltd and Dorado Group Ltd, both Seychelles registered companies. In the unlikely event of the government wanting to fix this, I frankly think they should (a) ban the use of LLP by anyone other than natural persons and (b) blacklist all the tax evasion jurisdictions entirely. They will never do the latter but might be persuaded to move on the former.
onetimemanytime 7y ago
OK, so you put the dirty $$ in the banking system. Then what? This can work in Russia and alike places but at least in USA you would have to declare it and answer soon or later how you got it. The former Economy Minister having $1.7 Billion in his account might ring a bell or two. Having it there and not being able to use is...useless.
- montzark 7y ago
  It's not on his account, he would have the credentials to make transactions with the account.
- Nomentatus 7y ago
  The usual trick is to then have your corporation (pile of illegal cash) loan "you" money - that was Manafort's way, for example. No tax owed on a loan, it's not income.
  - wp381640 7y ago
    interesting that part of the way Manafort was caught out is that he had his offshore company directly purchase things for him FBI raided his home, found many bespoke suits in his closet. They traced them back to a high-end tailor and retailer in LA and went and asked them who paid for the suits. From there they located the offshore company and found it was in complete control of Manafort Where in Beverly Hills did Manafort Spend $500,000 in suits? https://www.latimes.com/local/california/la-me-manafort-rodeo-drive-20171030-htmlstory.html https://www.latimes.com/local/california/la-me-manafort-rode...
  - C1sc0cat 7y ago
    HMRC are onto that one and are suing a lot of people over those scheames.
    - tomatocracy 7y ago
      It's more controversial than that. The government effectively passed a retrospective tax on this arrangement, called the 'loan charge' because they thought it should have been against the rules but it turned out in many instances it actually wasn't.
cletus 7y ago
An article about international money laundering that doesn't mention real estate. Weird. Because real estate in the developed has been, is and will continue to be a prime vehicle for money laundering by kleptocrats. Fun fact: all US tax residents, lawful permanent residents and citizens need to declare all foreign assets to the US government every year if they're over some pretty low thresholds. You may have to do this not once but twice if you're over slightly higher thresholds. One is or was known as FBAR and is a disclosure you need to make to the Department of the Treasury (specifically FinCEN). The other is Form 8938 and is part of your tax return (so to the IRS). Both require you to list all assets you own, co-own or otherwise have signatory authority over... except for real estate. If you earn money from real estate (eg by renting it out) then that needs to be declared (and possibly taxed) but the ownership of the property itself does not. Why? Who lobbied for that exception?
- dfraser992 7y ago
  BuzzFeed had a series of articles about a number of suspicious deaths of Russian expats who had fallen out with Putin or otherwise were persona non grata. Apparently the Home Office / upper echelons of the police were dragging their heels in investigating them - the general conspiracy theory is no one in the UK government really wants the flow of money from Russian oligarchs that is propping up the London property market to dry up. Tie that with May's speech sometime ago (little reported on) that the UK needs to be "better friends" with Russia (and this was _after_ Salisbury)... With this and Brexit and everything else, I really want out of this country. But then I'd have to move back to the US. As for the FBAR, it is annoying, but at least only tedious and not onerous. I will never have enough money to really justify having to fill out these forms - and the people who really ought to are the ones with enough to hire the specialists to hide it from the US government.
  - kingosticks 7y ago
    The FBAR limit is pretty low, around $10k isn't it? Once over that limit, are you really saying you could skip filing it on the basis of not having much money? The FACTA limit is much higher, most people wouldn't need to do that one.
mnm1 7y ago
Is it intentional? Of course it's intentional. This is how they bring in massive amounts of money. No doubt some of it ends up in politicians' coffers, directly or indirectly. Seeing the consequences of the change in law to allow this is trivial especially with the guy who kept trying to demonstrate it to the government. How ironic when the government is the one who intentionally initiated this. No wonder they charged only the whistleblower with filling false information. It's not stupidity, it's malice. As it typically is with humans, despite the obviously incorrect perception to the contrary that some are fooled by.
tompccs 7y ago
This is interesting, but as someone who has formed a UK limited company (and yes, it is as easy as the article claims), they've missed that the tricky part is getting a bank account. The onus is on the banks to carry out checks under "Know your Client", not Companies House. Registering a company in the UK doesn't really get you anything, other than a thin veneer of authenticity among people who don't understand how easy it is. Not saying it's not a problem, but they should have looked into how easy it is to get banking for these "novelty" businesses.
- mindfulplay 7y ago
  So would this mean you need a partner such as HSBC to overcome the KYC? Curious how this sort of high level crime can continue in the UK even after all these articles and investigations...
  - ptaipale 7y ago
    How is that (HSBC) relevant? The KYC requirement is still there.
    - gdy 7y ago
      https://www.theguardian.com/business/2012/dec/11/hsbc-bank-us-money-laundering https://www.theguardian.com/business/2012/dec/11/hsbc-bank-u...
      - ptaipale 7y ago
        Well, that's a 7-year-old article about past wrongdoings, so it's hardly a very relevant method just now.
        gdy 7y ago
        A leopard can't change its spots
        7y ago
coldtea 7y ago
>Among the characters who have used British shell companies to hide their money are Paul Manafort, disgraced former chairman of Donald Trump’s election campaign, and Viktor Yanukovich, overthrown president of Ukraine, among thousands of lower-profile opportunists. Including tons of other establishment figures, global leaders, kleptocrats, and business moguls, but of course only those in the eye of the British "national interests" or out of grace with the establishment on both sides of the pond, like Manafort and Yanukovich are mentioned in the BBC...
CryptoPunk 7y ago
1. Transaction reporting requirements are a blatant violation of privacy. Stopping crime is not a sufficient justification for warrantless mass surveillance of private interactions. 2. If money is dirty, you should be able to prove a crime was committed to procure that money. If you can't, then the allegation is mere suspicion, and we've entered the territory of "guilty until proven innocent" civil forfeiture.
- bjackman 7y ago
  I don't agree with your first point, but it sounds like the basis for a coherent argument. However I think your second point is arguing against a statement the article doesn't make at all. The article is really arguing about making it possible to prove guilt, not just seizing everyone's assets and then checking if they're dirty!
  - CryptoPunk 7y ago
    >>The article is really arguing about making it possible to prove guilt That's not how free societies work. The state must find evidence of a crime and then use that evidence to prove the crime occurred. It cannot require everyone to document their activity, and pass it off to authorities, under pain of imprisonment, so that authorities are given evidence of crimes as they occur. The idea that anything not vetted by the state should be suspected of being "dirty", and shunned, is a dangerous ideological framework that favors tyranny and extreme centralization of power.
- deleted 7y ago
  [deleted]
cascom 7y ago
At the end of the day people need to reconcile the fact that there is a tension between financial privacy and transparency for the sake of fighting crime. Additionally, there is the fact that the implementation of policy is typically a messy affair, and the added complexity that the state may not be the “good guy” (take civil abuses of civil forfeiture in the US as an example) makes the whole topic one that where clear lines are hard to draw.
zxcvbn4038 7y ago
Despite the clickbait title of the article, this isn’t complete information. Plenty of locales will be happy to take your money and register your company - named, numbered, owned by Larry, Moe, and Curly no problem. However banks still have their “know your customer” requirements, and generally need to understand and verify the ultimate owner of an entity. That is where the checks are. Just registering a company doesn’t give you access to a bank account. Where companies like HSBC get in trouble is they do the verification incorrectly, wink, and don’t discover the error until someone points it out to them. Money coming in and out of traditional tax havens gets a lot of scrutiny. As someone mentioned earlier most current money laundering schemes involve real estate or buying profitable businesses. I’ve read the mexican drug cartels will buy winning lottery tickets from people (at full value!) because it allows them to justify their income.
yboris 7y ago
Obligatory mention for the US: Delaware, the scumbag state - allowing tax avoidance.
rajeshp1986 7y ago
This is well known that UK laws protect people who commit financial crimes in other countries. UK is the destination for all corrupt Indian politicians and businessmen who committed financial crimes. [0] - https://qz.com/india/1301746/nirav-modi-to-vijay-mallya-high-profile-indian-fugitives-whove-fled-to-the-uk/ https://qz.com/india/1301746/nirav-modi-to-vijay-mallya-high...
stefek99 7y ago
Disappointed. I was hoping to learn something useful, instead "you can open a company without an ID" - anyone can do it. But what about making money?

227 points by akeck 7y ago

What this guide leaves out is the most important part: getting a bank account. I can’t speak to the process in the U.K. but in the United States the “know your customer” rules are quite strict and accounts for businesses are doubly so. Just having a set of incorporation papers won’t work and it can’t be done online (in my experience). Having a duly registered company with fake directors gets you nowhere without a bank account.

inflatableDodo 7y ago
You can buy a company with a bank account for a few thousand.
- wp381640 7y ago
  You can buy an offshore bank not too much more https://www.eternitylaw.net/info/litsenzii/offshore-bank-license/ https://www.eternitylaw.net/info/litsenzii/offshore-bank-lic... http://www.bankinglicensing.com/how-to-purchase-a-bank/banks-for-sale.pdf http://www.bankinglicensing.com/how-to-purchase-a-bank/banks...
  - baybal2 7y ago
    For not too much more, you can buy a shell bank in a much more established economy or had one created for you. All those draconian AML rules on individuals make no sense in light of that.
    - Scoundreller 7y ago
      Effectively, a lot of rules keep individuals honest, but let bigger entities run wild at their expense. It’s Unfair to say the least!
thaumasiotes 7y ago
> getting a bank account. I can’t speak to the process in the U.K. but in the United States the “know your customer” rules are quite strict and accounts for businesses are doubly so. Just having a set of incorporation papers won’t work and it can’t be done online (in my experience). This would really hurt the online-only banks if it were true. I opened a (personal) Capital One account online. https://en.wikipedia.org/wiki/Direct_bank https://en.wikipedia.org/wiki/Direct_bank
- jeanmichelx 7y ago
  You need to submit a passport picture though. It's probably easier to fake a badly lit picture of a passport than an actual passport though...
  - robkop 7y ago
    Lots of people post their passport photos when travelling on instagram, you could quite easily "borrow" one of them to send to the bank.
  - deleted 7y ago
    [deleted]
  - andyhmltn 7y ago
    Not for all of them. All I had to do to get a Starling account was send them a video of me saying my company name
  - sjf 7y ago
    I have opened many online bank accounts using only my social security number. I open bank accounts frequently for the sign up bonuses and haven't ever been asked to submit photo ID online.
jmakov 7y ago
Exactly. Obtaining a bank account requires person's ID and tax number. Even if you would know the private tax number, the person in question would get a high income tax and would start to investigate.
dfraser992 7y ago
I suppose things have changed a bit since I moved to the UK, but in my experience, the US is infinitely better than than the UK is terms of banking. It was quite easy to open up a business bank account in the US - took one day. Here, it is still hell to open up an initial personal bank account - passport, the residence permits, the proof of address... A few weeks at least. Once you are in the system, it does get a bit easier, but the UK system is still tied to the concept of you're associated with a specific branch at a specific location - it is like the 1950s in some ways. Larger banks are sort of more efficient, but it is not the US at all.
- ChrisSD 7y ago
  As a UK citizen, that last part doesn't seem true for my personal banking. Once you have an account it's very easy to open others at different banks. Just recently I opened a secondary account with an app only bank. Other finance apps can simply use the API to help you keep track of your own spending, etc. Of course immigrants may have additional hurdles with banking in the UK, I don't know.
  - dfraser992 7y ago
    This was 12 years ago, so things have changed, but man... when I first got here, landlords were wanting 6 months of rent upfront. The system was obviously designed (or it just came out that way) to make it hard for immigrants to initially establish themselves. These days, it is going to get a lot worse once Brexit happens. Perhaps you misunderstood me or I wasn't clear - when I first got here, I tried to deposit a check into my account using another branch / office than the one I where I opened my account. I couldn't. It is not a matter of opening another account with _another_ bank. From the little I know of the banking system, things are or were not then, as wholly integrated as they were in the States. OTOH, the US is only now catching up to the rest of the world w/ Chip and PIN debt/credit cards....
    - foldr 7y ago
      I could certainly deposit checks in any bank branch 12 years ago in the UK. Your experience there seems weird. Even 12 years ago, no-one in the UK really used checks, so that might have something to do with it. Opening an account is indeed unnecessarily difficult for immigrants, and UK landlords can get away with anything due to an almost total absence of regulation.
mojuba 7y ago
My understanding is, the purpose of these companies with fictional founders is for founding/owning other companies registered elsewhere. The article does mention that the chain of ownership crosses many borders and can become practically impenetrable or very expensive and time consuming to investigate. So let's say, somewhere in the chain of onwership there are some real unsuspecting people, possibly accounting agencies, managing real banking accounts. By the time you find them the money will be gone, the agencies will disappear, the occupants of the registered postal addresses will be different. You are going to need a lot of official inquiries in multiple countries to trace everything back to the source. It might prove to be almost impossible to do. Or by the time you finish your investigation Putin himself will be gone.
jmkni 7y ago
I used to be involved in a UK based startup (as a developer) where we would create a bank account for our customers as a part of the product. The AML/KYC process was outsourced. The customer would go through the registration form, provide their details, and then we would hit up the third party AML/KYC API, which would come back with details on the additional information required. We would then have to chase up the customer for this information (usually a picture of their passport/utility bill, that sort of thing) and provide this back to the third party handling AML/KYC, who would then give authorization to another third party to create the actual bank account. The whole thing seemed ripe for abuse. After a bank account was created, at no point was the customer contacted by the third party to tell them a bank account had been created in their name. If I was malicious and knew somebodies address history, DOB and had a picture of their passport, I could create a bank account for them with a couple of API calls, and they wouldn't have a clue. It used to be that to get a bank account you would have to physically go to the bank and meet a human being first, but we’ve moved away from that. We were closely watched by, and regularly in touch with, the FCA who didn't have any problem with what we were doing.
- amiga_500 7y ago
  FCA’s job is plausible deniability. Pre 2008 was regulatory arbitrage, begun under Tony Blair, who now has a nothing title at JPM. Gordon Brown, Alistair Darling and many others also took banking jobs after 2008, as did Stephanie Flanders, before this a BBC finance journalist.
csomar 7y ago
I got a US bank account by visiting the bank. No questions asked. So did my friend (different bank and state). I think you are over-estimating the KYC or visiting the more reasonable branches. Lots of branches in NY will be more than happy to open a bank account for you and give you a credit card if you have 1500-2000 US dollars.
pjc50 7y ago
I'm guessing that the bank account itself is outside the UK, just the corporate structure running through the UK. For example one of the companies mentioned: https://beta.companieshouse.gov.uk/company/OC364391/filing-history https://beta.companieshouse.gov.uk/company/OC364391/filing-h... : the two "members" of the limited liability partnership are Marteza Alliance Ltd and Dorado Group Ltd, both Seychelles registered companies. In the unlikely event of the government wanting to fix this, I frankly think they should (a) ban the use of LLP by anyone other than natural persons and (b) blacklist all the tax evasion jurisdictions entirely. They will never do the latter but might be persuaded to move on the former.

onetimemanytime 7y ago

OK, so you put the dirty $$ in the banking system. Then what? This can work in Russia and alike places but at least in USA you would have to declare it and answer soon or later how you got it. The former Economy Minister having $1.7 Billion in his account might ring a bell or two. Having it there and not being able to use is...useless.

montzark 7y ago
It's not on his account, he would have the credentials to make transactions with the account.
Nomentatus 7y ago
The usual trick is to then have your corporation (pile of illegal cash) loan "you" money - that was Manafort's way, for example. No tax owed on a loan, it's not income.
- wp381640 7y ago
  interesting that part of the way Manafort was caught out is that he had his offshore company directly purchase things for him FBI raided his home, found many bespoke suits in his closet. They traced them back to a high-end tailor and retailer in LA and went and asked them who paid for the suits. From there they located the offshore company and found it was in complete control of Manafort Where in Beverly Hills did Manafort Spend $500,000 in suits? https://www.latimes.com/local/california/la-me-manafort-rodeo-drive-20171030-htmlstory.html https://www.latimes.com/local/california/la-me-manafort-rode...
- C1sc0cat 7y ago
  HMRC are onto that one and are suing a lot of people over those scheames.
  - tomatocracy 7y ago
    It's more controversial than that. The government effectively passed a retrospective tax on this arrangement, called the 'loan charge' because they thought it should have been against the rules but it turned out in many instances it actually wasn't.

cletus 7y ago

An article about international money laundering that doesn't mention real estate. Weird. Because real estate in the developed has been, is and will continue to be a prime vehicle for money laundering by kleptocrats. Fun fact: all US tax residents, lawful permanent residents and citizens need to declare all foreign assets to the US government every year if they're over some pretty low thresholds. You may have to do this not once but twice if you're over slightly higher thresholds. One is or was known as FBAR and is a disclosure you need to make to the Department of the Treasury (specifically FinCEN). The other is Form 8938 and is part of your tax return (so to the IRS). Both require you to list all assets you own, co-own or otherwise have signatory authority over... except for real estate. If you earn money from real estate (eg by renting it out) then that needs to be declared (and possibly taxed) but the ownership of the property itself does not. Why? Who lobbied for that exception?

dfraser992 7y ago
BuzzFeed had a series of articles about a number of suspicious deaths of Russian expats who had fallen out with Putin or otherwise were persona non grata. Apparently the Home Office / upper echelons of the police were dragging their heels in investigating them - the general conspiracy theory is no one in the UK government really wants the flow of money from Russian oligarchs that is propping up the London property market to dry up. Tie that with May's speech sometime ago (little reported on) that the UK needs to be "better friends" with Russia (and this was _after_ Salisbury)... With this and Brexit and everything else, I really want out of this country. But then I'd have to move back to the US. As for the FBAR, it is annoying, but at least only tedious and not onerous. I will never have enough money to really justify having to fill out these forms - and the people who really ought to are the ones with enough to hire the specialists to hide it from the US government.
- kingosticks 7y ago
  The FBAR limit is pretty low, around $10k isn't it? Once over that limit, are you really saying you could skip filing it on the basis of not having much money? The FACTA limit is much higher, most people wouldn't need to do that one.

mnm1 7y ago

Is it intentional? Of course it's intentional. This is how they bring in massive amounts of money. No doubt some of it ends up in politicians' coffers, directly or indirectly. Seeing the consequences of the change in law to allow this is trivial especially with the guy who kept trying to demonstrate it to the government. How ironic when the government is the one who intentionally initiated this. No wonder they charged only the whistleblower with filling false information. It's not stupidity, it's malice. As it typically is with humans, despite the obviously incorrect perception to the contrary that some are fooled by.

tompccs 7y ago

This is interesting, but as someone who has formed a UK limited company (and yes, it is as easy as the article claims), they've missed that the tricky part is getting a bank account. The onus is on the banks to carry out checks under "Know your Client", not Companies House. Registering a company in the UK doesn't really get you anything, other than a thin veneer of authenticity among people who don't understand how easy it is. Not saying it's not a problem, but they should have looked into how easy it is to get banking for these "novelty" businesses.

mindfulplay 7y ago
So would this mean you need a partner such as HSBC to overcome the KYC? Curious how this sort of high level crime can continue in the UK even after all these articles and investigations...
- ptaipale 7y ago
  How is that (HSBC) relevant? The KYC requirement is still there.
  - gdy 7y ago
    https://www.theguardian.com/business/2012/dec/11/hsbc-bank-us-money-laundering https://www.theguardian.com/business/2012/dec/11/hsbc-bank-u...
    - ptaipale 7y ago
      Well, that's a 7-year-old article about past wrongdoings, so it's hardly a very relevant method just now.
      - gdy 7y ago
        A leopard can't change its spots
        7y ago

coldtea 7y ago

>Among the characters who have used British shell companies to hide their money are Paul Manafort, disgraced former chairman of Donald Trump’s election campaign, and Viktor Yanukovich, overthrown president of Ukraine, among thousands of lower-profile opportunists. Including tons of other establishment figures, global leaders, kleptocrats, and business moguls, but of course only those in the eye of the British "national interests" or out of grace with the establishment on both sides of the pond, like Manafort and Yanukovich are mentioned in the BBC...

CryptoPunk 7y ago

1. Transaction reporting requirements are a blatant violation of privacy. Stopping crime is not a sufficient justification for warrantless mass surveillance of private interactions. 2. If money is dirty, you should be able to prove a crime was committed to procure that money. If you can't, then the allegation is mere suspicion, and we've entered the territory of "guilty until proven innocent" civil forfeiture.

bjackman 7y ago
I don't agree with your first point, but it sounds like the basis for a coherent argument. However I think your second point is arguing against a statement the article doesn't make at all. The article is really arguing about making it possible to prove guilt, not just seizing everyone's assets and then checking if they're dirty!
- CryptoPunk 7y ago
  >>The article is really arguing about making it possible to prove guilt That's not how free societies work. The state must find evidence of a crime and then use that evidence to prove the crime occurred. It cannot require everyone to document their activity, and pass it off to authorities, under pain of imprisonment, so that authorities are given evidence of crimes as they occur. The idea that anything not vetted by the state should be suspected of being "dirty", and shunned, is a dangerous ideological framework that favors tyranny and extreme centralization of power.
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cascom 7y ago

At the end of the day people need to reconcile the fact that there is a tension between financial privacy and transparency for the sake of fighting crime. Additionally, there is the fact that the implementation of policy is typically a messy affair, and the added complexity that the state may not be the “good guy” (take civil abuses of civil forfeiture in the US as an example) makes the whole topic one that where clear lines are hard to draw.

zxcvbn4038 7y ago

Despite the clickbait title of the article, this isn’t complete information. Plenty of locales will be happy to take your money and register your company - named, numbered, owned by Larry, Moe, and Curly no problem. However banks still have their “know your customer” requirements, and generally need to understand and verify the ultimate owner of an entity. That is where the checks are. Just registering a company doesn’t give you access to a bank account. Where companies like HSBC get in trouble is they do the verification incorrectly, wink, and don’t discover the error until someone points it out to them. Money coming in and out of traditional tax havens gets a lot of scrutiny. As someone mentioned earlier most current money laundering schemes involve real estate or buying profitable businesses. I’ve read the mexican drug cartels will buy winning lottery tickets from people (at full value!) because it allows them to justify their income.

yboris 7y ago

Obligatory mention for the US: Delaware, the scumbag state - allowing tax avoidance.

rajeshp1986 7y ago

This is well known that UK laws protect people who commit financial crimes in other countries. UK is the destination for all corrupt Indian politicians and businessmen who committed financial crimes. [0] - https://qz.com/india/1301746/nirav-modi-to-vijay-mallya-high-profile-indian-fugitives-whove-fled-to-the-uk/ https://qz.com/india/1301746/nirav-modi-to-vijay-mallya-high...

stefek99 7y ago

Disappointed. I was hoping to learn something useful, instead "you can open a company without an ID" - anyone can do it. But what about making money?