8 ms·

City of London: Tax haven in the heart of Britain (2011)

89 points by lowmemcpu 6y ago

sprafa 6y ago
An enormous amount of money going through Britain appears to be money laundering. Look into real estate in london. An absurd situation. Anecdotally - I spoke to a Goldman Sachs guy who quit - he made software to flag “suspicious” transactions. He said it flagged millions everyday. Money coming in from Saudi Arabia, Gibraltar, Panama, Jersey etc. I asked him why did he quit? This seemed like a useful thing. Stopping such transactions is a good thing, no? He said “you don’t understand. All the software did was flag the transactions. It didnt stop them. It just marked them as ‘suspicious’” I was blown away. “Why have a piece of software that just flags the transactions and does nothing??” He said “Because that’s what the law demands. And so that when we get caught, we can go to the Parliament in the inquiry and say ‘you’re absolutely right, our software did mark this as a problem!’”
- xxpor 6y ago
  Wasn't one of the theories why the UK wanted to get Brexit done by New Year's this year that there was a new EU financial transparency directive coming into effect that might have exposed a lot of Conservative MP's financial dealings?
  - pydry 6y ago
    Except the UK is still bound by those regulations. The "getting Brexit done by new year" was a dog and pony show.
  - DaiPlusPlus 6y ago
    I'm a die-hard remainer, but I know that's untrue: https://fullfact.org/online/brexit-not-concealing-offshore-accounts/ https://fullfact.org/online/brexit-not-concealing-offshore-a...
    - raverbashing 6y ago
      Well, not about bank accounts (and that's on CRS and it's a couple of years old already anyway) but your link does mention two related laws/policies (one of them referring to companies)
    - rjmunro 6y ago
      That is specifically true, but I suspect being out of the EU will make the UK easier for money launderers and similar in the long term.
    - xxpor 6y ago
      Ah that's right, it was offshore accounts. Thanks for the link, good to know that wasn't actually the case.
  - deleted 6y ago
    [deleted]
  - pjc50 6y ago
    Of more interest is the suppressed "Russia Report": https://www.theguardian.com/politics/2020/jun/20/russia-report-uk-mps-condemn-utterly-reprehensible-delay https://www.theguardian.com/politics/2020/jun/20/russia-repo...
  - m0xte 6y ago
    I think it was a positive feedback loop across several data driven political outfits that happened to saturate into an exit eventuality. I don’t think our politicians are even in control of it. They just naively do what keeps working for them personally even if it involves skipping merrily off a cliff.
- rahimnathwani 6y ago
  Maybe the piece of software your friend worked on did nothing but flag the transactions. But I suspect a different piece of software (or manual process) prepared a Suspicious Activity Report (SAR) and submitted it to the relevant regulator(s) (UKFIU in the UK, FinCEN in the US, ...).
  - worik 6y ago
    How sweet! I, too am sure, they obeyed the spirit and letter of the law. Even when the opportunity cost of doing so was in the billions...
    - jandrese 6y ago
      And honestly, what is a LEO going to do with a multi-million line report every day? About the only thing you can do is lobby parliament to have the laws changed citing these reports as evidence of a problem. Enforcement on foreign nationals is extremely difficult and expensive and the outcomes are very much in question, especially as the people doing very large scale money laundering are usually well connected with their local governments.
      - JoeSmithson 6y ago
        There aren't that many, only about 500k a year [0]. The software OP mentions probably flagged transactions internally to another team to review, any genuinely suspicious ones would have then had a SAR submitted. [0] https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/money-laundering-and-terrorist-financing/suspicious-activity-reports https://www.nationalcrimeagency.gov.uk/what-we-do/crime-thre...
  - sprafa 6y ago
    He quit exactly because it did nothing else but flag them.
- hogFeast 6y ago
  And what most people don't understand is that all we can do is pass the details of these people to their govts (the UK has actually started implementing our law/values extraterritorially, this btw is exceptionally unusual for non-US countries, with UWOs but, afaik, this only really applies if you do something stupid like buy UK property). But generally: everyone has implemented US FACTA. All the old-style tax havens bar one or two have implemented (all the BOTs have). Laundering your money through London is an unbelievably bad idea, and has been for a long time (FATCA was the end, the US applied this extraterritorially so any bank that wanted to operate in the US had to comply globally). What people get confused about is: it is perfectly legitimate to have money in any of the locations you mention (it helps you avoid exactly zero tax) but it isn't legitimate to not report those accounts to your tax authority (and all UK institutions, even in BOTs, are legally obliged to report the names/details of people involved in transactions...no question), and if that local tax authority chooses not to act on that information there is not much that can really be done (some places have said they won't comply i.e. Russia but most tax authorities aren't communicating tax information back to banks anyway). Btw, software that flags suspicious transactions is used everywhere and that information is acted on (the FCA has regulators who check this, for what should be obvious reasons banks tend to be careful about who exactly does these investigations...if you work in this job, the FCA goes through your personal emails, they investigate your family, they investigate your friends, all your bank accounts are monitored...it isn't a joke). The issue is more often that the software doesn't work (i.e. a certain location has been flagged as high-risk but the software doesn't flag it)...and even then, firms are fined tens of millions on the spot if faults with their software are discovered. It is difficult to say that the UK is soft (particularly when most of the large scale tax loss is governments collaborating with large corporations to funnel profits).
  - jandrese 6y ago
    So you are saying that money laundering/tax evasion/trust theft no longer happens? Or do all of the relevant agencies have all of the information they need to stop it and choose not to use it?
    - hogFeast 6y ago
- axlee 6y ago
  > He said “Because that’s what the law demands. And so that when we get caught, we can go to the Parliament in the inquiry and say ‘you’re absolutely right, our software did mark this as a problem!’” Why even bother write a detection software then? Just flag all transactions, and you get the same level of plausible deniability.
  - mercer 6y ago
    I think that would be entirely too implausible, but maybe you're right.
  - mhh__ 6y ago
    Even the most overworked underpaid regulator isn't going to buy that 100% suspicious transactions is complying with either by the word of or in the spirit of the regulations.
  - imtringued 6y ago
    You can't claim that the software is working if it doesn't.
    - axlee 6y ago
      It catches 100% of fraudulent transactions though. /s
- mrtksn 6y ago
  I have a close friend working in compliance for a major bank and they do use multiple software to detect risky transactions and clients. Flagging is nothing, it would flag based on name similarity and all kinds of stuff but a human would have to review it. They use scoring, review clients and transactions while prioritizing on that score. Half of their time goes on optimization of the scoring and detection as the human review process is resource intensive. If they had a system rising millions of flags, the first thing they would do is to reduce these flags to a manageable level. There’s no way that so many transactions are high risk, they would get rid of clients rising that many red flags if those are legitimately risky transactions. If they don’t do good job in the compliance department, they receive multiple billion dollar fines. Simply, no client is valuable enough to risk these fines. Rise some flags and you’re out and reported to a regulator, they’re not going to let you flood the system with questionable transactions.
- ur-whale 6y ago
  I find it strange that most folks on HW are ardent defenders of encrypted communication, but when it comes to financial transactions, everyone seems to think it's a good thing governments have visibility. Do you folks realize being able to read everyone's communications and being able to see, verify and control all financial transactions is the exact same curtailing of liberty?
  - gbear605 6y ago
    It’s really not the exact same. Money is a different type of thing from communication. People in general are much more okay with limiting what one can do with money than with communication for a number of reasons. The essential point is that money is power while communication is not. There are some things that we don’t want to allow people to have the power to do, so we have to restrict money usage and thus see how money is used.
    - disappearance 6y ago
      I agree, I’m wondering about the difference. Despite being intangible like communications, transactions are perhaps better evidence that something tangible has happened or is about to happen.
- deleted 6y ago
  [deleted]
- amelius 6y ago
  > Look into real estate in london. An absurd situation. It's absurd in a lot of big cities, simply because land is scarce and governments fail to see that this leads to a failing market. On top of this, they fail to plan the construction of new houses.
  - jungturk 6y ago
    Certainly true, but a liquid market of subjectively valued items that preserve value well - art, jewelry, and real estate - is awfully convenient. If I were someone who needed defensible transfers of large amounts of wealth in discreet transactions, London real estate laws certainly are convenient.
    - imtringued 6y ago
      The problem isn't that they are preserving their value. It's that they are growing quickly in value which is something that shouldn't happen with an essential human need like housing.
  - mcv 6y ago
    Dutch organised crime also used to be (still is?) deeply involved in real estate. Several famous underworld figures were officially real estate traders or real estate financiers. Not sure if this is still going on, but it was pretty big a decade or two ago.
- gambiting 6y ago
  Have you posted this before? I'm 100% sure that I read exactly what you just said, verbatim, some time ago.
  - verylittlemeat 6y ago
    Wow I'm glad you made this comment because I thought I was going crazy. Weird that I can't find it in the archives but I know I read it before.
- mcv 6y ago
  Doesn't the law also specify at least reporting those suspicious transactions to authorities so they can investigate?
deleted 6y ago
[deleted]
dang 6y ago
Discussed at the time: https://news.ycombinator.com/item?id=8181308 https://news.ycombinator.com/item?id=8181308
slashdotdash 6y ago
The Spider’s Web is a documentary film which covers this subject in detail. Well worth watching if you have an interest in finding out more. “An investigation into the world of Britain’s secrecy jurisdictions and the City of London. Today, up to half of global offshore wealth may be hidden in British offshore jurisdictions and Britain and its offshore jurisdictions are the largest global players in the world of international finance.” http://spiderswebfilm.com/ http://spiderswebfilm.com/
juskrey 6y ago
UK got one thing right: it is not only beneficial, but also rightful to help other people part with dirty money. Pretending that all money can fit some "clean" model and fully feed the economy at the same time, like (part of) EU tries to do, is a dangerous fallacy. Switzerland got that too, but they fell prey to US long before that banking privacy defeat. So now, like in old good times, UK plays on par with US.
- Barrin92 6y ago
  It's neither beneficial nor rightful. First, it's not rightful because laundering money for corrupt states aids their oligarchy or corrupt regimes, which directly harms the people in said countries. I'm not sure what moral standards you have that somehow sees supporting corruption as good. Secondly, it's not beneficial to the UK in the mid and long term because this money flows into assets like London real-estate without providing any actual jobs or innovation, thus not providing any value to ordinary British citizens while pricing them out of the city. It's endemic corruption on both sides, and a direct result of the lack of British competitiveness in most other fields for decades now. The UK is well on its way from being the world's most inventive nation to an oversized Canary Islands.
  - raverbashing 6y ago
    > Secondly, it's not beneficial to the UK in the mid and long term because this money flows into assets like London real-estate without providing any actual jobs or innovation, thus not providing any value to ordinary British citizens while pricing them out of the city. So, it will increase rents for the landlords. Good for the UK overall? No. Good for people on the real-estate business (a lot of them very well connected politically)? You bet)
    - imtringued 6y ago
      Foreign investors aren't renting apartments. They are buying them and this means they are the landlords.
Havoc 6y ago
>usually with secrecy as their prime offering. lol. The only ones selling bank secrecy these days is Hollywood action movies. It died out in the real world years ago. All the major offshore locations report holdings to the US tax authorities (FATCA) and the EU tax authorities (CRS).
- zymhan 6y ago
  and yet > Then there is the City’s Cash, “a private fund built up over the last eight centuries”, which, among many other things, helps buy off dissent. Only part of it is visible: the Freedom of Information Act applies solely to its mundane functions as a local authority or police authority. Its assets are beyond proper democratic scrutiny. Tax laws aren't the sole way of ensuring financial transparency.
  - Havoc 6y ago
    Well yeah - if you grant someone autonomy you do lose a fair bit of control. To some extent it's a case of can't have your cake and eat it too. It's not exactly a coincidence that the City is in the center of London. Or rather the rest exists around it. London's prosperity is linked to it's existence to some extent. Services account for 77% of London exports & a big chunk of that is financial services.
linuxftw 6y ago
The presumption is that this area deserves to have less autonomy. Perhaps the author should consider the reverse: the rest of the country deserves more autonomy. If you are so concerned for the city's special privileges, perhaps you should vote (ha!) for the same privileges to be applied to yourself. Instead, predictably, the author wants the states power to expand ever further.
boring_twenties 6y ago
This book from around the same time goes into detail into global tax havens (including lots on CoL and its history), and the insidious ways that system has integrated itself into the "legitimate" global financial system. I'm not an expert on the topic but I found the book hard to put down. edit: The book: https://smile.amazon.com/Treasure-Islands-Uncovering-Offshore-Banking/dp/0230341721 https://smile.amazon.com/Treasure-Islands-Uncovering-Offshor...
- waterfowl 6y ago
  The book is by the same author as the article.
  - boring_twenties 6y ago
    Good catch.
hpoe 6y ago
For those interested in learning more about the City of London there is a youtuber, CGP Grey, who has to great 10 min vids on what it is why it exists and how it operates. Link here: https://www.youtube.com/watch?v=LrObZ_HZZUc https://www.youtube.com/watch?v=LrObZ_HZZUc
- rjmunro 6y ago
  That video is so much better than the above description makes it sound.
- twic 6y ago
  If you think the City is wild, wait until you find out about the Temples - a couple of office complexes for elite lawyers, descended from a Templar church, which are their own local authority, carved out from the City: https://www.middletemple.org.uk/about-us/freedom-information/local-authority-functions https://www.middletemple.org.uk/about-us/freedom-information... https://londonist.com/london/things-to-do/middle-temple-history-explore https://londonist.com/london/things-to-do/middle-temple-hist...
amiga_500 6y ago
The UK is the biggest enemy to western democracy. http://spiderswebfilm.com http://spiderswebfilm.com
- devmunchies 6y ago
  i'd say hedonism and emotional control is more of a threat.
  - amiga_500 6y ago
    I'd say The City siphoning off tax money from governments who are cutting services is a bigger problem.
oxAAAFFB 6y ago
By the way, I just arrived in London for holiday and am in self quarantine. Any suggestions on what I should do when I get out?
- tomcam 6y ago
  Take a suitcase full of cash to the City of London…
- twic 6y ago
  What sort of things do you like to do?
- throwaway_12351 6y ago
  - A morning stroll through Hyde Park, by far the best health activity ever, especially in summer. - Paddle boarding in Camden, one of my favorite summer activity while social distancing! - Borough Market for food!
cbnotfromthere 6y ago
It's a left-wing article published on a left-wing magazine. Blaming "money". Let's not act surprised or pretend this is serious.
twic 6y ago
This article weaves together lots of weird and wonderful historical detail to depict the City as a malign and unstoppable force, but it's all bollocks. It's a pile of allusion and errors, written for an audience who will accept this stuff uncritically. Some examples: > The term “tax haven” is a bit of a misnomer, because such places aren’t just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering. There are no laws, rules, or taxes which apply everywhere else in the UK which don't apply in the City. > A few examples illustrate the carve-out. Whenever the Queen The queen is a purely ceremonial figure. > The Remembrancer, whose position dates from the reign of Elizabeth I, is the City’s official lobbyist in parliament That particular official is unique to the City, but other local authorities have their own lobbyists in parliament: https://www.local.gov.uk/parliament https://www.local.gov.uk/parliament > The City Corporation is different from any other local authority. Here, hi-tech global finance melds into ancient rites and customs that underline its separateness and power with mystifying pomp. Among the City’s 108 livery companies, or trade associations The livery companies don't play any role in the government of the City. > They were astonished to find that the corporation was a big shareholder in the development - a public authority acting as a private company, outside its jurisdiction. I can believe that this was something unique back in 2002, because that was before local authorities were granted the "general power of competence". But they got that in 2011, and now it's routine for them to make investments in all sorts of things. https://www.local.gov.uk/sites/default/files/documents/general-power-competence--0ac.pdf https://www.local.gov.uk/sites/default/files/documents/gener... > Unlike any other local authority, however, individual people are not the only voters: businesses can vote, too. Nope. Businesses can appoint some of their employees as voters, and the voters can then vote. The businesses get to chose who is a voter, but votes are by secret ballot as usual, so they have no real influence on the actual voting. You can read the rules here: https://www.cityoflondon.gov.uk/about-the-city/voting-elections/Documents/wardmote-book-june-2014.pdf https://www.cityoflondon.gov.uk/about-the-city/voting-electi... > Political parties are not involved - candidates stand alone as independents - and this makes organised challenge to City consensus all but impossible. It's not that political parties are banned or anything, just that they so far haven't managed to unseat independents. Mostly - Labour won five seats in the 2017 elections. > This “missed time” is significant, Glasman says, because it means the City’s rights pre-date the construction of modern political Britain, and this has placed it outside parliament’s normal legislative remit. The City has various rights and privileges that don't stem from legislation, because they're so old. But that doesn't mean they're outside parliament's legislative remit. If parliament passed an act changing something in the City, that thing would change. It's a similar situation to royal prerogative powers. > So, the corporation has two main claims to being a tax haven: first, as a semi-alien entity, floating partly free from Britain (just as the Cayman Islands are), and second, as the hub of a global network of tax havens sucking up offshore trillions from around the world and sending it, or the business of handling it, to London. Neither of which make it a tax haven in any sense at all. > Not only that, but the Lord Mayor and colleagues promise to “take up cudgels on behalf of the City anywhere in the world on any subject which is of concern to the City”. Yes, in much the same way as every local authority will work to advance the interests of its local businesses - including Cornwall: https://www.cornwallti.com/about-us/ https://www.cornwallti.com/about-us/ Honestly, this article is sensationalist nonsense.

89 points by lowmemcpu 6y ago

An enormous amount of money going through Britain appears to be money laundering. Look into real estate in london. An absurd situation. Anecdotally - I spoke to a Goldman Sachs guy who quit - he made software to flag “suspicious” transactions. He said it flagged millions everyday. Money coming in from Saudi Arabia, Gibraltar, Panama, Jersey etc. I asked him why did he quit? This seemed like a useful thing. Stopping such transactions is a good thing, no? He said “you don’t understand. All the software did was flag the transactions. It didnt stop them. It just marked them as ‘suspicious’” I was blown away. “Why have a piece of software that just flags the transactions and does nothing??” He said “Because that’s what the law demands. And so that when we get caught, we can go to the Parliament in the inquiry and say ‘you’re absolutely right, our software did mark this as a problem!’”

xxpor 6y ago
Wasn't one of the theories why the UK wanted to get Brexit done by New Year's this year that there was a new EU financial transparency directive coming into effect that might have exposed a lot of Conservative MP's financial dealings?
- pydry 6y ago
  Except the UK is still bound by those regulations. The "getting Brexit done by new year" was a dog and pony show.
- DaiPlusPlus 6y ago
  I'm a die-hard remainer, but I know that's untrue: https://fullfact.org/online/brexit-not-concealing-offshore-accounts/ https://fullfact.org/online/brexit-not-concealing-offshore-a...
  - raverbashing 6y ago
    Well, not about bank accounts (and that's on CRS and it's a couple of years old already anyway) but your link does mention two related laws/policies (one of them referring to companies)
  - rjmunro 6y ago
    That is specifically true, but I suspect being out of the EU will make the UK easier for money launderers and similar in the long term.
  - xxpor 6y ago
    Ah that's right, it was offshore accounts. Thanks for the link, good to know that wasn't actually the case.
- deleted 6y ago
  [deleted]
- pjc50 6y ago
  Of more interest is the suppressed "Russia Report": https://www.theguardian.com/politics/2020/jun/20/russia-report-uk-mps-condemn-utterly-reprehensible-delay https://www.theguardian.com/politics/2020/jun/20/russia-repo...
- m0xte 6y ago
  I think it was a positive feedback loop across several data driven political outfits that happened to saturate into an exit eventuality. I don’t think our politicians are even in control of it. They just naively do what keeps working for them personally even if it involves skipping merrily off a cliff.
rahimnathwani 6y ago
Maybe the piece of software your friend worked on did nothing but flag the transactions. But I suspect a different piece of software (or manual process) prepared a Suspicious Activity Report (SAR) and submitted it to the relevant regulator(s) (UKFIU in the UK, FinCEN in the US, ...).
- worik 6y ago
  How sweet! I, too am sure, they obeyed the spirit and letter of the law. Even when the opportunity cost of doing so was in the billions...
  - jandrese 6y ago
    And honestly, what is a LEO going to do with a multi-million line report every day? About the only thing you can do is lobby parliament to have the laws changed citing these reports as evidence of a problem. Enforcement on foreign nationals is extremely difficult and expensive and the outcomes are very much in question, especially as the people doing very large scale money laundering are usually well connected with their local governments.
    - JoeSmithson 6y ago
      There aren't that many, only about 500k a year [0]. The software OP mentions probably flagged transactions internally to another team to review, any genuinely suspicious ones would have then had a SAR submitted. [0] https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/money-laundering-and-terrorist-financing/suspicious-activity-reports https://www.nationalcrimeagency.gov.uk/what-we-do/crime-thre...
- sprafa 6y ago
  He quit exactly because it did nothing else but flag them.
hogFeast 6y ago
And what most people don't understand is that all we can do is pass the details of these people to their govts (the UK has actually started implementing our law/values extraterritorially, this btw is exceptionally unusual for non-US countries, with UWOs but, afaik, this only really applies if you do something stupid like buy UK property). But generally: everyone has implemented US FACTA. All the old-style tax havens bar one or two have implemented (all the BOTs have). Laundering your money through London is an unbelievably bad idea, and has been for a long time (FATCA was the end, the US applied this extraterritorially so any bank that wanted to operate in the US had to comply globally). What people get confused about is: it is perfectly legitimate to have money in any of the locations you mention (it helps you avoid exactly zero tax) but it isn't legitimate to not report those accounts to your tax authority (and all UK institutions, even in BOTs, are legally obliged to report the names/details of people involved in transactions...no question), and if that local tax authority chooses not to act on that information there is not much that can really be done (some places have said they won't comply i.e. Russia but most tax authorities aren't communicating tax information back to banks anyway). Btw, software that flags suspicious transactions is used everywhere and that information is acted on (the FCA has regulators who check this, for what should be obvious reasons banks tend to be careful about who exactly does these investigations...if you work in this job, the FCA goes through your personal emails, they investigate your family, they investigate your friends, all your bank accounts are monitored...it isn't a joke). The issue is more often that the software doesn't work (i.e. a certain location has been flagged as high-risk but the software doesn't flag it)...and even then, firms are fined tens of millions on the spot if faults with their software are discovered. It is difficult to say that the UK is soft (particularly when most of the large scale tax loss is governments collaborating with large corporations to funnel profits).
- jandrese 6y ago
  So you are saying that money laundering/tax evasion/trust theft no longer happens? Or do all of the relevant agencies have all of the information they need to stop it and choose not to use it?
  - hogFeast 6y ago
axlee 6y ago
> He said “Because that’s what the law demands. And so that when we get caught, we can go to the Parliament in the inquiry and say ‘you’re absolutely right, our software did mark this as a problem!’” Why even bother write a detection software then? Just flag all transactions, and you get the same level of plausible deniability.
- mercer 6y ago
  I think that would be entirely too implausible, but maybe you're right.
- mhh__ 6y ago
  Even the most overworked underpaid regulator isn't going to buy that 100% suspicious transactions is complying with either by the word of or in the spirit of the regulations.
- imtringued 6y ago
  You can't claim that the software is working if it doesn't.
  - axlee 6y ago
    It catches 100% of fraudulent transactions though. /s
mrtksn 6y ago
I have a close friend working in compliance for a major bank and they do use multiple software to detect risky transactions and clients. Flagging is nothing, it would flag based on name similarity and all kinds of stuff but a human would have to review it. They use scoring, review clients and transactions while prioritizing on that score. Half of their time goes on optimization of the scoring and detection as the human review process is resource intensive. If they had a system rising millions of flags, the first thing they would do is to reduce these flags to a manageable level. There’s no way that so many transactions are high risk, they would get rid of clients rising that many red flags if those are legitimately risky transactions. If they don’t do good job in the compliance department, they receive multiple billion dollar fines. Simply, no client is valuable enough to risk these fines. Rise some flags and you’re out and reported to a regulator, they’re not going to let you flood the system with questionable transactions.
ur-whale 6y ago
I find it strange that most folks on HW are ardent defenders of encrypted communication, but when it comes to financial transactions, everyone seems to think it's a good thing governments have visibility. Do you folks realize being able to read everyone's communications and being able to see, verify and control all financial transactions is the exact same curtailing of liberty?
- gbear605 6y ago
  It’s really not the exact same. Money is a different type of thing from communication. People in general are much more okay with limiting what one can do with money than with communication for a number of reasons. The essential point is that money is power while communication is not. There are some things that we don’t want to allow people to have the power to do, so we have to restrict money usage and thus see how money is used.
  - disappearance 6y ago
    I agree, I’m wondering about the difference. Despite being intangible like communications, transactions are perhaps better evidence that something tangible has happened or is about to happen.
deleted 6y ago
[deleted]
amelius 6y ago
> Look into real estate in london. An absurd situation. It's absurd in a lot of big cities, simply because land is scarce and governments fail to see that this leads to a failing market. On top of this, they fail to plan the construction of new houses.
- jungturk 6y ago
  Certainly true, but a liquid market of subjectively valued items that preserve value well - art, jewelry, and real estate - is awfully convenient. If I were someone who needed defensible transfers of large amounts of wealth in discreet transactions, London real estate laws certainly are convenient.
  - imtringued 6y ago
    The problem isn't that they are preserving their value. It's that they are growing quickly in value which is something that shouldn't happen with an essential human need like housing.
- mcv 6y ago
  Dutch organised crime also used to be (still is?) deeply involved in real estate. Several famous underworld figures were officially real estate traders or real estate financiers. Not sure if this is still going on, but it was pretty big a decade or two ago.
gambiting 6y ago
Have you posted this before? I'm 100% sure that I read exactly what you just said, verbatim, some time ago.
- verylittlemeat 6y ago
  Wow I'm glad you made this comment because I thought I was going crazy. Weird that I can't find it in the archives but I know I read it before.
mcv 6y ago
Doesn't the law also specify at least reporting those suspicious transactions to authorities so they can investigate?

deleted 6y ago

[deleted]

dang 6y ago

Discussed at the time: https://news.ycombinator.com/item?id=8181308 https://news.ycombinator.com/item?id=8181308

slashdotdash 6y ago

The Spider’s Web is a documentary film which covers this subject in detail. Well worth watching if you have an interest in finding out more. “An investigation into the world of Britain’s secrecy jurisdictions and the City of London. Today, up to half of global offshore wealth may be hidden in British offshore jurisdictions and Britain and its offshore jurisdictions are the largest global players in the world of international finance.” http://spiderswebfilm.com/ http://spiderswebfilm.com/

juskrey 6y ago

UK got one thing right: it is not only beneficial, but also rightful to help other people part with dirty money. Pretending that all money can fit some "clean" model and fully feed the economy at the same time, like (part of) EU tries to do, is a dangerous fallacy. Switzerland got that too, but they fell prey to US long before that banking privacy defeat. So now, like in old good times, UK plays on par with US.

Barrin92 6y ago
It's neither beneficial nor rightful. First, it's not rightful because laundering money for corrupt states aids their oligarchy or corrupt regimes, which directly harms the people in said countries. I'm not sure what moral standards you have that somehow sees supporting corruption as good. Secondly, it's not beneficial to the UK in the mid and long term because this money flows into assets like London real-estate without providing any actual jobs or innovation, thus not providing any value to ordinary British citizens while pricing them out of the city. It's endemic corruption on both sides, and a direct result of the lack of British competitiveness in most other fields for decades now. The UK is well on its way from being the world's most inventive nation to an oversized Canary Islands.
- raverbashing 6y ago
  > Secondly, it's not beneficial to the UK in the mid and long term because this money flows into assets like London real-estate without providing any actual jobs or innovation, thus not providing any value to ordinary British citizens while pricing them out of the city. So, it will increase rents for the landlords. Good for the UK overall? No. Good for people on the real-estate business (a lot of them very well connected politically)? You bet)
  - imtringued 6y ago
    Foreign investors aren't renting apartments. They are buying them and this means they are the landlords.

Havoc 6y ago

>usually with secrecy as their prime offering. lol. The only ones selling bank secrecy these days is Hollywood action movies. It died out in the real world years ago. All the major offshore locations report holdings to the US tax authorities (FATCA) and the EU tax authorities (CRS).

zymhan 6y ago
and yet > Then there is the City’s Cash, “a private fund built up over the last eight centuries”, which, among many other things, helps buy off dissent. Only part of it is visible: the Freedom of Information Act applies solely to its mundane functions as a local authority or police authority. Its assets are beyond proper democratic scrutiny. Tax laws aren't the sole way of ensuring financial transparency.
- Havoc 6y ago
  Well yeah - if you grant someone autonomy you do lose a fair bit of control. To some extent it's a case of can't have your cake and eat it too. It's not exactly a coincidence that the City is in the center of London. Or rather the rest exists around it. London's prosperity is linked to it's existence to some extent. Services account for 77% of London exports & a big chunk of that is financial services.

linuxftw 6y ago

The presumption is that this area deserves to have less autonomy. Perhaps the author should consider the reverse: the rest of the country deserves more autonomy. If you are so concerned for the city's special privileges, perhaps you should vote (ha!) for the same privileges to be applied to yourself. Instead, predictably, the author wants the states power to expand ever further.

boring_twenties 6y ago

This book from around the same time goes into detail into global tax havens (including lots on CoL and its history), and the insidious ways that system has integrated itself into the "legitimate" global financial system. I'm not an expert on the topic but I found the book hard to put down. edit: The book: https://smile.amazon.com/Treasure-Islands-Uncovering-Offshore-Banking/dp/0230341721 https://smile.amazon.com/Treasure-Islands-Uncovering-Offshor...

waterfowl 6y ago
The book is by the same author as the article.
- boring_twenties 6y ago
  Good catch.

hpoe 6y ago

For those interested in learning more about the City of London there is a youtuber, CGP Grey, who has to great 10 min vids on what it is why it exists and how it operates. Link here: https://www.youtube.com/watch?v=LrObZ_HZZUc https://www.youtube.com/watch?v=LrObZ_HZZUc

rjmunro 6y ago
That video is so much better than the above description makes it sound.
twic 6y ago
If you think the City is wild, wait until you find out about the Temples - a couple of office complexes for elite lawyers, descended from a Templar church, which are their own local authority, carved out from the City: https://www.middletemple.org.uk/about-us/freedom-information/local-authority-functions https://www.middletemple.org.uk/about-us/freedom-information... https://londonist.com/london/things-to-do/middle-temple-history-explore https://londonist.com/london/things-to-do/middle-temple-hist...

amiga_500 6y ago

The UK is the biggest enemy to western democracy. http://spiderswebfilm.com http://spiderswebfilm.com

devmunchies 6y ago
i'd say hedonism and emotional control is more of a threat.
- amiga_500 6y ago
  I'd say The City siphoning off tax money from governments who are cutting services is a bigger problem.

oxAAAFFB 6y ago

By the way, I just arrived in London for holiday and am in self quarantine. Any suggestions on what I should do when I get out?

tomcam 6y ago
Take a suitcase full of cash to the City of London…
twic 6y ago
What sort of things do you like to do?
throwaway_12351 6y ago
- A morning stroll through Hyde Park, by far the best health activity ever, especially in summer. - Paddle boarding in Camden, one of my favorite summer activity while social distancing! - Borough Market for food!

cbnotfromthere 6y ago

It's a left-wing article published on a left-wing magazine. Blaming "money". Let's not act surprised or pretend this is serious.

twic 6y ago

This article weaves together lots of weird and wonderful historical detail to depict the City as a malign and unstoppable force, but it's all bollocks. It's a pile of allusion and errors, written for an audience who will accept this stuff uncritically. Some examples: > The term “tax haven” is a bit of a misnomer, because such places aren’t just about tax. What they sell is escape: from the laws, rules and taxes of jurisdictions elsewhere, usually with secrecy as their prime offering. There are no laws, rules, or taxes which apply everywhere else in the UK which don't apply in the City. > A few examples illustrate the carve-out. Whenever the Queen The queen is a purely ceremonial figure. > The Remembrancer, whose position dates from the reign of Elizabeth I, is the City’s official lobbyist in parliament That particular official is unique to the City, but other local authorities have their own lobbyists in parliament: https://www.local.gov.uk/parliament https://www.local.gov.uk/parliament > The City Corporation is different from any other local authority. Here, hi-tech global finance melds into ancient rites and customs that underline its separateness and power with mystifying pomp. Among the City’s 108 livery companies, or trade associations The livery companies don't play any role in the government of the City. > They were astonished to find that the corporation was a big shareholder in the development - a public authority acting as a private company, outside its jurisdiction. I can believe that this was something unique back in 2002, because that was before local authorities were granted the "general power of competence". But they got that in 2011, and now it's routine for them to make investments in all sorts of things. https://www.local.gov.uk/sites/default/files/documents/general-power-competence--0ac.pdf https://www.local.gov.uk/sites/default/files/documents/gener... > Unlike any other local authority, however, individual people are not the only voters: businesses can vote, too. Nope. Businesses can appoint some of their employees as voters, and the voters can then vote. The businesses get to chose who is a voter, but votes are by secret ballot as usual, so they have no real influence on the actual voting. You can read the rules here: https://www.cityoflondon.gov.uk/about-the-city/voting-elections/Documents/wardmote-book-june-2014.pdf https://www.cityoflondon.gov.uk/about-the-city/voting-electi... > Political parties are not involved - candidates stand alone as independents - and this makes organised challenge to City consensus all but impossible. It's not that political parties are banned or anything, just that they so far haven't managed to unseat independents. Mostly - Labour won five seats in the 2017 elections. > This “missed time” is significant, Glasman says, because it means the City’s rights pre-date the construction of modern political Britain, and this has placed it outside parliament’s normal legislative remit. The City has various rights and privileges that don't stem from legislation, because they're so old. But that doesn't mean they're outside parliament's legislative remit. If parliament passed an act changing something in the City, that thing would change. It's a similar situation to royal prerogative powers. > So, the corporation has two main claims to being a tax haven: first, as a semi-alien entity, floating partly free from Britain (just as the Cayman Islands are), and second, as the hub of a global network of tax havens sucking up offshore trillions from around the world and sending it, or the business of handling it, to London. Neither of which make it a tax haven in any sense at all. > Not only that, but the Lord Mayor and colleagues promise to “take up cudgels on behalf of the City anywhere in the world on any subject which is of concern to the City”. Yes, in much the same way as every local authority will work to advance the interests of its local businesses - including Cornwall: https://www.cornwallti.com/about-us/ https://www.cornwallti.com/about-us/ Honestly, this article is sensationalist nonsense.