3 ms·

As a Brit, I've never had the sense the UK (specifically the City of London) has any genuine interest in tackling money laundering. I suspect our economy is str

by Oarch 7mo ago

As a Brit, I've never had the sense the UK (specifically the City of London) has any genuine interest in tackling money laundering. I suspect our economy is structurally reliant upon us being extremely good at it.

joe_mamba 7mo ago
Isn't the whole point of the City of London, to be a legal money laundering economic zone, that brings banks, corporations, money and jobs to the UK?
- echelon_musk 7mo ago
  Pretty much, yes.
- jordanb 7mo ago
  Specifically the Eurodollar is the main reason for the City of London to exist. Eurodollars are US dollar deposits at European banks. Originally these were used as a way to give the Soviet Union access to the dollar markets through French banks, but eventually it became a way for basically anyone to participate in dollar exchange who can't have a US bank account. https://en.wikipedia.org/wiki/Eurodollar https://en.wikipedia.org/wiki/Eurodollar
Lio 7mo ago
Really? What are you basing that on? Having worked at FinTechs and in finance in general that doesn't ring true at all. The FCA definitely takes anti-money laundering checks quite seriously. e.g. (off the top of my head) NatWest were fined £264 million for AML breaches. I'm no expert by any means but if I wanted to flout the rules I'd definitely consider a few other juristictions before the City.
- londons_explore 7mo ago
  AML tech is so primitive, it almost looks like it's designed that anyone 'in the know' will know how to not be detected. Eg. Most AML checks are done because someone wrote some triggering keyword in the payment reference field. Do we honestly think a criminal mastermind won't manage to come up with something else to write there?
  - multjoy 7mo ago
    The references are almost irrelevant. The banks + fintechs have far more depth than that.
  - Onavo 7mo ago
    The AML you are thinking of is designed to catch small time crooks and drug mules (and maybe also dumb terrorist supporters). They are not really designed (or more specifically deliberately obtuse towards) Slavic oligarch money. Not all "corruption" and money laundering are treated equally. Places like London (not to mention Jersey), Switzerland, and Singapore are more for good old fashioned siphoning-of-national-assets type of corruption where there's almost always a "clean" paper trail to back things up. Also, don't get tax dodging mixed with money laundering. There are plenty of processes required by OECD and similar orgs, e.g. the concepts of a LEI number, that are not really useful against real oligarch/state level money launderers. Here's a simple example: You lived in a former USSR/iron curtain state. During the chaos of '89 you managed to "acquire" lots of assets or finagle yourself into owning former public companies/real estate/factories. The paper trail is clean as far as your typical London banks are concerned because you are merely liquidating assets you own in your own country where there's a full paper trail (regardless of whether it was attained through illegitimate means). Alternatively, in a different narrative, you a rich international student from similar types of countries and you just happened to have "rich parents" who have plenty of money to throw around. It's a very different threat model than for example trying to prevent grassroots terrorism financing. Money laundering vs tax evasion have a lot of overlap but don't get them confused. They are very different threat models from the perspective of the service provider (and it's also why many smaller foreign banks refuse to accept Americans as customers, partially because of the paperwork required to stay compliant with Uncle Sam). If you want an actual no-questions-asked romp of organized crime type of money I believe the current main contenders are the middle eastern states like Dubai (pre Iranian conflict at least). Rumor through the financial grapevine is that ironically there are many GCC middle eastern royalty/pseudo-royalty currently under house arrest who are trying to do the opposite i.e. get their assets out of the country because their main bank accounts are frozen domestically. So basically real life Nigerian princes. (As for why they are under house arrest, it's kinda out of scope for HN but mostly because of domestic political purges, especially in Saudi Arabia from what I heard)
deleted 7mo ago
[deleted]
fiftyacorn 7mo ago
I think the power is knowing who is moving what and where
- mosura 7mo ago
  Our money laundering supports freedom, while theirs supports tyranny etc. I love the whole “unexplained wealth” concept the UK developed, curiously enough after Abramovich had been running around buying Chelsea etc. If you are friend to MI6 this week you are allowed to do anything, but if you get on their wrong side you will be Berezhovskied.
  - shiroiuma 7mo ago
    There's a British TV series called "The Night Manager" that seems to show how MI6 really works and what its priorities are.
  - fiftyacorn 7mo ago
    Most AML courses Ive done have emphisized that the people behind high level money laundering can be too dangerous to take down You even see this with suspicious deaths of lawyers and accountants in this area?
    - mosura 7mo ago
      > Most AML courses Ive done have emphisized that the people behind high level money laundering can be too dangerous to take down This is how they deliberately miss the point. They are not taken down not because they are dangerous but because they align with us, and will buy tat from our buddies in Mayfair and Knightsbridge at inflated prices with some of the proceeds. British high society is completely rotten by this stuff. They are still amazed that Al Fayed was’t nearly as grimy as many had assumed.
underlipton 7mo ago
Western affluence was built on the movement of stolen people and goods; it stands to reason that its maintenance in an era where one of those is illegal and the other involves somewhat less looting might involve the movement of stolen debt (money).
- underlipton 7mo ago
  Why are you booing me I'm right.
0x3f 7mo ago
If an oligarch extracts wealth from Russia and parks it in London... that seems like a win for London? It is a bit anarcho-tyrannical in nature though. That is, the AML/FCA stuff then has the outcome of only effectively constraining the UK's own law-abiding citizens. Which is... something of a disadvantage? Especially when half of what the FCA puts out in terms of regulations is pure time-wasting theater.
- jfil 7mo ago
  The thing about banks: AML is for the small fry. The big money launderers walk in the front door as VIPs, they don't have to sneak around. A good recent case is how TD Bank actively helped cartels launder money. An interesting scenario from the past was BCCI, a bank founded to lend legitimacy to criminals (I'm sure it wasn't the last of its kind).
- dzhiurgis 7mo ago
  > If an oligarch extracts wealth from Russia and parks it in London... that seems like a win for London? It is a win and it’s not an illegal money laundering.

by Oarch 7mo ago

joe_mamba 7mo ago

Isn't the whole point of the City of London, to be a legal money laundering economic zone, that brings banks, corporations, money and jobs to the UK?

echelon_musk 7mo ago
Pretty much, yes.
jordanb 7mo ago
Specifically the Eurodollar is the main reason for the City of London to exist. Eurodollars are US dollar deposits at European banks. Originally these were used as a way to give the Soviet Union access to the dollar markets through French banks, but eventually it became a way for basically anyone to participate in dollar exchange who can't have a US bank account. https://en.wikipedia.org/wiki/Eurodollar https://en.wikipedia.org/wiki/Eurodollar

Lio 7mo ago

Really? What are you basing that on? Having worked at FinTechs and in finance in general that doesn't ring true at all. The FCA definitely takes anti-money laundering checks quite seriously. e.g. (off the top of my head) NatWest were fined £264 million for AML breaches. I'm no expert by any means but if I wanted to flout the rules I'd definitely consider a few other juristictions before the City.

londons_explore 7mo ago
AML tech is so primitive, it almost looks like it's designed that anyone 'in the know' will know how to not be detected. Eg. Most AML checks are done because someone wrote some triggering keyword in the payment reference field. Do we honestly think a criminal mastermind won't manage to come up with something else to write there?
- multjoy 7mo ago
  The references are almost irrelevant. The banks + fintechs have far more depth than that.
- Onavo 7mo ago
  The AML you are thinking of is designed to catch small time crooks and drug mules (and maybe also dumb terrorist supporters). They are not really designed (or more specifically deliberately obtuse towards) Slavic oligarch money. Not all "corruption" and money laundering are treated equally. Places like London (not to mention Jersey), Switzerland, and Singapore are more for good old fashioned siphoning-of-national-assets type of corruption where there's almost always a "clean" paper trail to back things up. Also, don't get tax dodging mixed with money laundering. There are plenty of processes required by OECD and similar orgs, e.g. the concepts of a LEI number, that are not really useful against real oligarch/state level money launderers. Here's a simple example: You lived in a former USSR/iron curtain state. During the chaos of '89 you managed to "acquire" lots of assets or finagle yourself into owning former public companies/real estate/factories. The paper trail is clean as far as your typical London banks are concerned because you are merely liquidating assets you own in your own country where there's a full paper trail (regardless of whether it was attained through illegitimate means). Alternatively, in a different narrative, you a rich international student from similar types of countries and you just happened to have "rich parents" who have plenty of money to throw around. It's a very different threat model than for example trying to prevent grassroots terrorism financing. Money laundering vs tax evasion have a lot of overlap but don't get them confused. They are very different threat models from the perspective of the service provider (and it's also why many smaller foreign banks refuse to accept Americans as customers, partially because of the paperwork required to stay compliant with Uncle Sam). If you want an actual no-questions-asked romp of organized crime type of money I believe the current main contenders are the middle eastern states like Dubai (pre Iranian conflict at least). Rumor through the financial grapevine is that ironically there are many GCC middle eastern royalty/pseudo-royalty currently under house arrest who are trying to do the opposite i.e. get their assets out of the country because their main bank accounts are frozen domestically. So basically real life Nigerian princes. (As for why they are under house arrest, it's kinda out of scope for HN but mostly because of domestic political purges, especially in Saudi Arabia from what I heard)

deleted 7mo ago

[deleted]

fiftyacorn 7mo ago

I think the power is knowing who is moving what and where

mosura 7mo ago
Our money laundering supports freedom, while theirs supports tyranny etc. I love the whole “unexplained wealth” concept the UK developed, curiously enough after Abramovich had been running around buying Chelsea etc. If you are friend to MI6 this week you are allowed to do anything, but if you get on their wrong side you will be Berezhovskied.
- shiroiuma 7mo ago
  There's a British TV series called "The Night Manager" that seems to show how MI6 really works and what its priorities are.
- fiftyacorn 7mo ago
  Most AML courses Ive done have emphisized that the people behind high level money laundering can be too dangerous to take down You even see this with suspicious deaths of lawyers and accountants in this area?
  - mosura 7mo ago
    > Most AML courses Ive done have emphisized that the people behind high level money laundering can be too dangerous to take down This is how they deliberately miss the point. They are not taken down not because they are dangerous but because they align with us, and will buy tat from our buddies in Mayfair and Knightsbridge at inflated prices with some of the proceeds. British high society is completely rotten by this stuff. They are still amazed that Al Fayed was’t nearly as grimy as many had assumed.

underlipton 7mo ago

Western affluence was built on the movement of stolen people and goods; it stands to reason that its maintenance in an era where one of those is illegal and the other involves somewhat less looting might involve the movement of stolen debt (money).

underlipton 7mo ago
Why are you booing me I'm right.

0x3f 7mo ago

If an oligarch extracts wealth from Russia and parks it in London... that seems like a win for London? It is a bit anarcho-tyrannical in nature though. That is, the AML/FCA stuff then has the outcome of only effectively constraining the UK's own law-abiding citizens. Which is... something of a disadvantage? Especially when half of what the FCA puts out in terms of regulations is pure time-wasting theater.

jfil 7mo ago
The thing about banks: AML is for the small fry. The big money launderers walk in the front door as VIPs, they don't have to sneak around. A good recent case is how TD Bank actively helped cartels launder money. An interesting scenario from the past was BCCI, a bank founded to lend legitimacy to criminals (I'm sure it wasn't the last of its kind).
dzhiurgis 7mo ago
> If an oligarch extracts wealth from Russia and parks it in London... that seems like a win for London? It is a win and it’s not an illegal money laundering.